Hey Flagpole,
I am senior in college looking to put my money in a Roth IRA from the internships I had this summer. I earned about 7,000 this summer. Do you think it is a good idea putting some or most of this money in a Roth? And if I were to invest it where should I put?
Thanks a lot
idiot_101 wrote:
Hey Flagpole,
I am senior in college looking to put my money in a Roth IRA from the internships I had this summer. I earned about 7,000 this summer. Do you think it is a good idea putting some or most of this money in a Roth? And if I were to invest it where should I put?
Thanks a lot
You should not invest until you have a post-college job (that's true for most people...if you have a job waiting for you in a family business or something, then fine, but otherwise, wait).
Before you invest that money, do the following:
1) 3-6 months of expenses. This will be bigger when you graduate (likely, unless you live at home or something).
2) Pay off all debts except for a mortgage (and you shouldn't buy a house yet either). There are some exceptions here...LARGE student loans over $100,000, and I could give a pass on a 0% car loan or something like that, but the real goal should be to be debt free except for a mortgage, so in your case, just debt free.
3) When you have the job and you have the emergency fund and you have no debt, THEN yes, invest in your Roth IRA. The order of retirement accounts is this...401k up to the match then Roth IRA and then back to the 401k. As a younger person, you should have all of your funds within those retirement accounts in stocks...no bonds until you're about 35. Can do index funds or spread evenly between growth, growth and income, aggressive growth, and international.
The goal is to get into a position to be able to invest as soon as you can. Good luck.
Save yourself the time of listening to this egotistical blowhard and go straight to the source from which he plagiarizes-- www.daveramsey.com . Dave Ramsey's plan works and he's got much more of a selfless, less of a fukknuckle mindset than F***stik Willy. Merry Christmas!
Jay Yell wrote:
Save yourself the time of listening to this egotistical blowhard and go straight to the source from which he plagiarizes--
http://www.daveramsey.com. Dave Ramsey's plan works and he's got much more of a selfless, less of a fukknuckle mindset than F***stik Willy. Merry Christmas!
Dave Ramsey is good, and I talk about him frequently. I am different from him though. I accept some debt if at great rates (though I prefer no debt). I use a credit card and think you CAN if you aren't a stupid person who buys more than you can afford. Ramsey is dead set against credit cards. He says to pay off the house before investing beyond 15% into retirement accounts. I have a non-retirement mutual fund while still having a mortgage. I also don't mind taking a reasonable loan for college. Ramsey says to save up and pay or go slowly or whatever you can do to not have a college loan. I say that's BS. I had $7,500 in student loans, and they helped me pay for college and graduate by age 22. I would have lost a year's salary if I waited to go to college. Some loans are ok. Just you need to pay them off quickly when you can.
Flagpole,
I just quickly read over this but have a few questions. Are you saying to pay off debts before you start investing? I am 27 and have had a full time job since April of 07. I currently probably have $45k in student loans to pay off, but I contribute 12% of each paycheck to my 401K and have been doing this since I was able to start contributing. My company matches 3%. I have about 10 grand in my savings account and have been thinking about maybe starting a Roth IRA. Should I wait until I have more of my loans paid off before doing the Roth? Should I contribute less to my 401K? Any help?