# money advice **URL:** \ **Category:** In My Humble Opinion\ **Created:** [May 16, 2012, 12:23am UTC](https://boards.straightdope.com/t/money-advice/622040 "2012-05-16T00:23:13Z")\ **Posts on this page:** 11\ **Page:** 1
**Author:** ![seaptho](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@seaptho](https://boards.straightdope.com/u/seaptho)\ **Post date:** [May 16, 2012, 12:23am UTC](https://boards.straightdope.com/t/money-advice/622040/1 "2012-05-16T00:23:13Z")
I’ve reached my 5,000 dollar Roth IRA limit for the year, and am looking for any ideas for someone in their 20’s on other good ideas for saving? I also have regular high-yield savings (like .08%) with a bunch of money there. At work I contribute about 15% to my 401k. Thank you! ---
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [May 16, 2012, 12:34am UTC](https://boards.straightdope.com/t/money-advice/622040/2 "2012-05-16T00:34:46Z")
You are doing unusually well for someone in their twenties. Keep that up for the long-haul and you will easily be a multi-millionaire in a few decades. I too have struggled with this recently but it is a good problem. With savings like that, you need to diversify outside of retirement accounts. Real estate is an especially good deal right now. You don’t have to live in whatever you buy but you could. I bought a fixer-upper condo on the cheap and live in it right now. It looks good after a few months of sweat equity and I can move out right now and make several hundred dollars a month from someone else’s rent over all my costs. I could also buy any other condo in this building and rent my current one and repeat until I owned the whole complex if I had the energy to do it. Tangible assets like real estate are really good if you know what you are doing but I would stay away from fads like gold because you are too young. I think Europe is about to collapse economically and have devastating consequences to world economy. It won’t be apocalyptic to the U.S. but it will drag down stock market returns for years and may go negative again. When in doubt, just stockpile the cash in a safe place. ---
**Author:** ![Dendarii\_Dame](https://avatars.discourse-cdn.com/v4/letter/d/bbce88/32.png) [@Dendarii\_Dame](https://boards.straightdope.com/u/Dendarii_Dame)\ **Post date:** [May 16, 2012, 12:58pm UTC](https://boards.straightdope.com/t/money-advice/622040/3 "2012-05-16T12:58:46Z")
You’ve probably thought of this already, but do you have an emergency fund? Also, if you have any debt, try to pay that down. I agree, you’re doing some very smart and sensible things. ---
**Author:** ![seaptho](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@seaptho](https://boards.straightdope.com/u/seaptho)\ **Post date:** [May 16, 2012, 2:47pm UTC](https://boards.straightdope.com/t/money-advice/622040/4 "2012-05-16T14:47:23Z")
Thanks for the advice guys. I definitely have been thinking about a house Shagnasty, and I’m fortunate enough to not have any debt Dendarii. ---
**Author:** ![gwendee](https://avatars.discourse-cdn.com/v4/letter/g/35a633/32.png) [@gwendee](https://boards.straightdope.com/u/gwendee)\ **Post date:** [May 16, 2012, 3:05pm UTC](https://boards.straightdope.com/t/money-advice/622040/5 "2012-05-16T15:05:30Z")
Seems as if you ought to be giving advice rather than seeking it. You are far ahead of where I am. My post is just to commend you. In my twenties all of my money went to concert tickets. ---
**Author:** ![Time\_Stranger](https://avatars.discourse-cdn.com/v4/letter/t/5fc32e/32.png) [@Time\_Stranger](https://boards.straightdope.com/u/Time_Stranger)\ **Post date:** [May 16, 2012, 3:17pm UTC](https://boards.straightdope.com/t/money-advice/622040/6 "2012-05-16T15:17:31Z")
It may benefit you to establish a relationship with a financial planner. They can help you chart out possibilities far into the future and let you know about the tax effects of what/how you’re saving. As a 20-something that’s already maxed out their Roth, you’re kind of a dream case for them. They can help you choose what is most tax-advantageous for you. If you’re already saving upwards of 15% for retirement, you may want to move into higher risk investing. Do you have other goals you want to save for? Like a down payment for a house or future education savings for (possible) children. For insurance needs, do you have adequate long-term and short-term disability and liability insurance? You’d probably want to try to build anywhere from 3-12 months worth of an emergency fund in liquid assets if you can if you haven’t already. You could look into money market accounts (lower risk), bonds, or annuities too, but I have no idea what current interest rates are like. ---
**Author:** ![seaptho](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@seaptho](https://boards.straightdope.com/u/seaptho)\ **Post date:** [May 16, 2012, 3:28pm UTC](https://boards.straightdope.com/t/money-advice/622040/7 "2012-05-16T15:28:47Z")
Thanks gwendee, but luck plays into it too — my dad saves his butt off but had a hell of a time finding a job 🙂 > [@Time\_Stranger](#): > > It may benefit you to establish a relationship with a financial planner. They can help you chart out possibilities far into the future and let you know about the tax effects of what/how you’re saving. As a 20-something that’s already maxed out their Roth, you’re kind of a dream case for them. They can help you choose what is most tax-advantageous for you. If you’re already saving upwards of 15% for retirement, you may want to move into higher risk investing. > > Do you have other goals you want to save for? Like a down payment for a house or future education savings for (possible) children. For insurance needs, do you have adequate long-term and short-term disability and liability insurance? > > You’d probably want to try to build anywhere from 3-12 months worth of an emergency fund in liquid assets if you can if you haven’t already. > > You could look into money market accounts (lower risk), bonds, or annuities too, but I have no idea what current interest rates are like. Yeah, the goal was to buy a house with not much of a mortgage, that way the only concern would be taxes and possible HOA’s/maintenance. I’ll definitely seek out a financial adviser as you suggested. ---
**Author:** ![Labrador\_Deceiver](https://avatars.discourse-cdn.com/v4/letter/l/7c8e57/32.png) [@Labrador\_Deceiver](https://boards.straightdope.com/u/Labrador_Deceiver)\ **Post date:** [May 16, 2012, 3:32pm UTC](https://boards.straightdope.com/t/money-advice/622040/8 "2012-05-16T15:32:33Z")
> [@seaptho](#): > > Thanks gwendee, but luck plays into it too — my dad saves his butt off but had a hell of a time finding a job 🙂 > > Yeah, the goal was to buy a house with not much of a mortgage, that way the only concern would be taxes and possible HOA’s/maintenance. > > I’ll definitely seek out a financial adviser as you suggested. You’re in good shape, as I’m sure you already know. I’m an FA, so feel free to send me a PM if you want a little free advice. ---
**Author:** ![sachertorte](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sachertorte/32/3727_2.png) [@sachertorte](https://boards.straightdope.com/u/sachertorte)\ **Post date:** [May 16, 2012, 3:59pm UTC](https://boards.straightdope.com/t/money-advice/622040/9 "2012-05-16T15:59:47Z")
> [@seaptho](#): > > At work I contribute about 15% to my 401k. Is 15% the maximum you can contribute? The 401k limit is: [$17,000 for 2012](http://www.irs.gov/retirement/participant/article/0,,id=151786,00.html) I would try and hit the limit if at all possible. After that, I’m generally a fan of low fee index funds for easy investment. While a financial planner seems like a good idea, it may not be worthwhile for your situation. You seem to be a natural saver, so you may not need a financial planner who essentially tells you, “In order to reach goal X, you need to save Y each month.” I like low fee index funds since you don’t wind up paying someone else to “play the market” for you. Generally, the “experts” don’t do all that much better than the market in general so why pay extra? Also, with many mutual funds you can invest a bit each month (dollar cost averaging) without triggering extra fees. ---
**Author:** ![Cicero](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cicero/32/3594_2.png) [@Cicero](https://boards.straightdope.com/u/Cicero)\ **Post date:** [May 17, 2012, 1:01am UTC](https://boards.straightdope.com/t/money-advice/622040/10 "2012-05-17T01:01:10Z")
In my twenties all my money went on booze and loose women. The rest I wasted. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [May 17, 2012, 10:27pm UTC](https://boards.straightdope.com/t/money-advice/622040/11 "2012-05-17T22:27:10Z")
Do you know of the bogleheads message board [diehards.org](http://diehards.org)? I’ve gotten a lot of good financial advice and education there. Generally, the rule of thumb progression for saving money is (in this order): 1. Emergency Fund 2. Pay off high interest debt 3. 401(k) up to employer’s match 4. IRA to limit 5. 401(k) to limit 6. Taxable investing Sounds like you’re up to step 6. The taxable thing can be whatever you want. Someone mentioned real estate. You can also get a brokerage account and invest in stocks and bonds. Generally it’s better to hold stocks in taxable and bonds in tax-advantaged accounts to minimize taxes. I’d recommend finding an asset allocation you can live with and sticking with it.