Track to financial freedom

[recentcollegegrad]

Hi everyone....I just have been reading around and wanted to post a typical "how am I doing" thread. I just graduated college (22) and my annual salary is 55K.

My only major monthly expenses are rent (650) my share of utilities (120) gas (200 - i have a long commute) medical (50-75) cell (50) and food (200-400). Obviously I will have sporadic big expenses, ie, new tires, a vacation, christmas expenses, etc, but other than that, those are my main expenses.

I currently have 200K in high risk stocks. I am contributing 10-15% of my take home pay into a ROTH since my company 401K match does not occur until after 1 year of employment.

After two years of employment, the position most accept after my rotational program salary is $70-75K.

I have very little to no savings, so my plan is to keep my expenses low and build my savings to about 5-10K in the next two years in addition to adding 10-15% to my roth (and switching over to my 401K once I get company match in 1 year).

I am estimating that I will need 3-5 mill$ for retirement in 40+ years, but, that is so hard to predict...with that in mind, the safer the better which is why I want to save strongly.

[bjl584]

You have very little savings, yet you have $200,000 in stocks?

Where did all that money come from? You are 22 and just graduated college. Inheritance?

[mcfroggin]

200k in stocks puts you way ahead of others your age.

[recentcollegegrad]

You have very little savings, yet you have $200,000 in stocks?

Where did all that money come from? You are 22 and just graduated college. Inheritance?

Yes my parents have set up a trust fund for me.

[jpg7n16]

Obviously I will have sporadic big expenses, ie, new tires, a vacation, christmas expenses, etc, but other than that, those are my main expenses.

I'll give you a budgeting secret:

You can plan the date of your vacation
Christmas will be on Dec 25th, and shopping will take place over the couple of weeks ahead of time
tires wear out over time about 4-5 years

there are 12 months in a year, so 48-60 months til you need new tires
x months til your vacation
and about 4 months til you will be buying for Christmas


So take the cost of new tires, divide by 48: amount to save each month for expected tire expense
Take the cost of your vacation, divide by X: amount to save each month for expected vacation expense
and take the amount you expect to spend on Christmas gifts and divide by 4: amount to save each month for expected Christmas expense



My point is - these are not sporadic expenses. They have a timeframe, and you can plan accordingly.

[recentcollegegrad]

I guess I don't like the idea of "over engineering". If I need money I can get it from my trust fund, thus am planning on aggressively contributing to my ROTH over the next year and slowly building my liquid savings aside from the cash value (which is probably 1-4,000K) in my trust fund. By slowly I mean 1,500-2,500 avg over the next 2-3 years until it reaches a reasonable amount that I feel comfortable with.

[photo]

thus am planning on aggressively contributing to my ROTH over the next year

You can only contribute up to $5,000 a year to a Roth.

[jteezie]

Hi. I like your mentality. You are in a great position with that trust fund, but I want to suggest that you plan your life and finances as if you did not have that trust, otherwise you will always have it as a crutch. Aim to save at least 1 mn for retirement on your own.

And when you finally achieve true self made financial freedom, donate some of the trust assets or do whatever. See the trust as a tool that gives you options and enable s you to chose work that you really care about (opposed to taking a job because you need the paycheck), but don't rely on it to carry you long term financially.

good luck.