Finances for you guys that are good with money

[d_prada1]

Okay so here is the deal. Im currently 23 years old and deployed. Ill be back home in a couple of weeks and with my GI bill I plan on finishing school up.

I have always been pretty good with moving money in terms of cars. Buying selling parts and cars, I started with a crx which I purchased for 300 when I was 16 and now have an NSX with not much money spent out of pocket...Working on cars on the side for cash (engine rebuilds/trannies ect)

I have 2 years of school done so another 2 to get a degree. I also have a Powerplant degree from the FAA.
I realized working with my hands is not something I want to do for a living.

So until I figure out what I'm going to be doing exactly I want to ask what I should do with my money.

When I return ill have about 20k cash and my NSX which although I like, I don't mind letting go to support an investment.

For you guys that have made your money work for you...what would you do if you were in my shoes?

Thanks!

(I'm in the reserves for you guys that are wondering why I won't continue working when I return)

 

[jond]

If it were me, I would keep it in a safe place(ING savings or somewhere) and make a goal of paying off your first house quickly when you get to that point.
Personally I would avoid the stock market, but that's just me.

 

[sahtt]

At 23 without a strong finance/investing background your goals should not be focused on where you put the money - it should be on aggregating it. Focus on your education and avoid debt. Young men out of the military tend to do very poorly financially which is a horrible shame. One day I hope to start a non profit to alleviate this; for the time being I've helped a few vets that have returned from service for a six pack.

Spend a lot of time and energy determining what school you should graduate from, what degree to get, and then develop a realistic strategy to do so. Make no excuses and get the job done. Try to save a meaningful amount of money on a regular time frame, i.e. $1k a month if you have a good job. Put at least half in an IRA, even if it's in cash for the time being, and the rest in a brokerage account. People will tell you to maximize the IRA's first but that doesn't always work out well in the real world. You may have car trouble, decide to go to grad school, need to help a fellow vet in hard times, etc. and it's good to have part of it in a non-retirement account. Once you are totally stable you will want to max out your IRA's first. Again, focus on saving the money and learn about the investing part (which is secondary) as you go by reading as much as you can. People tend to get all excited about risky stocks and get burned early and it affects their attitude toward investing from then on.

There is a ton of good information in the stock market thread; I myself have probably 100 posts in there which at least a few are pretty thorough. If you save $1k a month, get a good education, and avoid debt you will be a superstar within 5-10 years and hopefully will never have any serious money problems.

 

[docjohn]

at your age your greatest long term investment is you...so work on maximizing your ability to make money,which may mean education/networking/hard work.You will need all your savings in the short term to do this.

 

[Vega$ NSX]

I would say for your age $20K is just about the right amount of money for a rainy day fund if you don't have one already. Keep it in a safe, very liquid, interest bearing account for when life throws you a curve ball.

 

[sca037]

Thank you for your service.

sahtt is a wealth of financial knowledge so read his post again.

I'll add that how you manage your cash flow is very important.
Skipping cable / satellite tv and watching whatever is on the antenna (which is all digital BTW) will save you what, a grand a year right there?
Once home, buy groceries and pack your lunch every day........those savings add up pretty fast.
You get the idea.
It's not just how much you earn, but how much you can keep (and you're not taxed on thriftiness ;-)

You could consider your NSX a non-depreciating asset at this point, so not a bad place to have 'parked' some relatively liquid cash as well.

Brian

 

[myw]

bingo to sahht's post.

to the op, i (as im sure many here on the board) was in a similar situation as you at your age $ wise... but it took a few very painful lessons in my 20s re 'investing' whether it be stocks, 'safe mutual funds' etc etc.. to learn that when you are young; just keep working hard, learning, and *rely upon yourself*. running my own business and real estate paved some success for me in my early 30s; and like others have mentioned below... you'll have to save like mad for years before any form of success will materialize.

work hard, enjoy some of your hard earned money since life is short.... and try to always have strong savings, with cash on hand you'll always have options.

with that said to dab a little to play and learn isnt a bad thing... its when ppl dump all their eggs when things get heated (more or less is almost always, regardless of age) is when things get wayyyy out of control.

i am a firm believer that there are no shortcuts (especially when you are young iike yourself)... ive seen far too many ppl have huge sums of money wiped away very quickly because they wanted their money to 'work for them'... when in fact that were already farrrrrr ahead of the game. the retired millionaires in my neighborhood have shared some very humbling lessons that i am super grateful to learn; without having to go through the lessons first hand.

sahtt, where in the blue hell were you when i was 21? always appreciate your amazing insights.

At 23 without a strong finance/investing background your goals should not be focused on where you put the money - it should be on aggregating it. Focus on your education and avoid debt. Young men out of the military tend to do very poorly financially which is a horrible shame. One day I hope to start a non profit to alleviate this; for the time being I've helped a few vets that have returned from service for a six pack.

Spend a lot of time and energy determining what school you should graduate from, what degree to get, and then develop a realistic strategy to do so. Make no excuses and get the job done. Try to save a meaningful amount of money on a regular time frame, i.e. $1k a month if you have a good job. Put at least half in an IRA, even if it's in cash for the time being, and the rest in a brokerage account. People will tell you to maximize the IRA's first but that doesn't always work out well in the real world. You may have car trouble, decide to go to grad school, need to help a fellow vet in hard times, etc. and it's good to have part of it in a non-retirement account. Once you are totally stable you will want to max out your IRA's first. Again, focus on saving the money and learn about the investing part (which is secondary) as you go by reading as much as you can. People tend to get all excited about risky stocks and get burned early and it affects their attitude toward investing from then on.

There is a ton of good information in the stock market thread; I myself have probably 100 posts in there which at least a few are pretty thorough. If you save $1k a month, get a good education, and avoid debt you will be a superstar within 5-10 years and hopefully will never have any serious money problems.

 

[NSXLNT]

Wanna keep most of what you earn? Never get divorced..................

 

[d_prada1]

Great info in here. Thanks guys! Sound like ill just saving my money. The gi bill will pay my way through school so maybe get a part time and save that cash till I finish!

Thanks guys I will keep your advice in mind!