Is It Bad To Have More In Pm Than You Do In Your Savings Act

I guess no one in here has ever bought a home. Depending on where you live a nice 4 bedroom 2 car garage will cost you 200K. Now assuming you do put 20% down.. you still have over 150K in debt.. Now that is also assuming you have no auto loan debt. I don't know about you but I like to be in a safe reliable vehicle, and I don't buy foreign cars. So you add another 20-30K for a car. That puts you about where I am in life at 28. So for the person who says wow how can you dig yourself out of that much debt.. are you kidding me. You must live on a 1/2 acre lot.. living in a 1985 single wide trailer, driving the same old car you had in high school. And no one said you have to have inherited money to be rich. I was simply saying that when you start with nothing, and you want to have nice things its going to cost you money.

My mentality is not what put the country in debt. I don't have more than 1 credit card, I never go to pay day loans, and not once have I had to ask for welfare, food stamps, or any time of government assistance. If anything I am keeping the country going buy purchasing goods, vehicles, homes, etc... So I don't know what else I have to say. I think some of you think I am this horrible person because I have debt. Do I owe any one of you? Nope!! So don't worry about it. Life goes on.. We will see who has what in the end.

Have a good weekend folks :)

Despite that there is a reasonable argument that PM prices have bottomed out and may stabilize there's not a whole lot of reason to think they are going back up to the highs they hit back in 2011.

At your age you should be looking into the stock market and if you're not that knowledgeable or interested look into no-load mutual funds from established companies like Vanguard. You're young so you can go for an aggressive growth fund. Reinvest all your dividends and don't worry about all the dips and peaks. You'll be buying more shares when the market dips to compensate for the peaks.

Perseverance will pay off, watch the money grow, and when you have extra you can still invest elsewhere and in PM too as diversification of your assets is important so that if stocks dip and metals surge you can sell the metal and buy more stock. Over the long-haul few things out perform the stock market. That said, whatever you do when it comes to stocks, buying and holding almost always beats "playing the market" because there is no shorter route to the poor house than thinking you can beat the Casinos of Wall Street, but if you leave them your money to work with in a mutual fund they can treat you pretty well.

To add to that I have a 1861-S 2.5 Cornet :Liberty head on way in real nice uncleaned condition....

Does NOBODY not see the importance of such a piece, anybody not realize the significance of a 1861 gold coin over 150 years old in real nice shape perhaps MS state.

What happened that was significant in 1861?

The civil war began, and MANY would buy this piece just for that fact alone, and the possibility Robert E Lee himself or US Grant may have had this coin in their pocket at one time no matter how unlikely it is, makes it special and the gold to many is just a most key bonus....

I notice as the war continued 1862, 63 an 64 the gold coins produced were WAY SCARCE which makes sense there was little money for minting gold at that time, and most you find from 62-65 seem to just be one dollar gold pieces....

I read with great interest that everyone here having a difference in perspective of "investing", bad debt and good debt?

There's no way we can be out of debt, even after paying off your current debt, there's always new debts that comes through. However one's decide to invest their money, its ones own decision. I have listen to so called top financial adviser's in the mid 90's that didn't come out good as years goes by, wish I didn't have it there too long. I also allocate some of my holdings in PM then just because these adviser's didn't think PM is a "good investment". Glad I did so! The key is to diversify to minimize risks.

As I age I make decisions on how much wiggle room I can risk without affecting my lifestyle, if I make good ones I spend a little more going out and eat out more, vice verse if the outcome was the other way.

I would plan short term goals between 6-18 months, and longer term goals between 2-5 years. Adjusting over time.

Jenger:

Congratulations of being debt free! You are ahead of many people your age.

Here is my advice since you asked. I would stop stacking PM and start saving some money. You need to have an emergency fund so you don't have to use a credit card when something bad happens. You don't need a year of expenses at this point in life since you don't live on your own so if you lost your job you wouldn't be homeless in a couple of months. I would shoot for $1500 in a savings account. Don't try to save in your checking account, start a saving account and be disciplined to not touch that money unless you have a true emergency.

You also need to start saving for retirement. As others have said, you will be on your own and the sooner you start saving, the smaller the percentage of your paycheck you have to save. I would shoot for 10% of your income to start. You need to get into the stock market. I know you are afraid of it but you will not get ahead without investing. It doesn't have to be complicated, you shouldn't be trying to pick individual stocks. I would recommend Vanguard's Target 2050 Fund. It is an index fund based on your targeted retirement year. It has very low fees which is very important to maximizing your long term returns. This fund requires a minimum of $1000 to buy in so you will need to save for a while in your savings account. After the initial $1000 you can save in small amounts weekly. You will be investing in an Roth IRA (Individual Retirement Account). IRA's are different from 401K's. A 401K is run by your employer while an IRA is between you and a bank.

So in summary:
1. Save $1500 in a saving account for emergencies.
2. Save $1000 more in your savings account so you can buy into an IRA.
3. Start saving 10% a week into your IRA

This is just the basics, you will also need to start thinking about what you need to move out on your own in the future. That will take money because most landlords require about 3 months rent up front plus you will need money for security deposits to turn on your utilities.

You should also stop smoking. Not only is it very expensive but it will kill you. I watched my grandfather die from lung cancer and it is a horrible way to die. I am also watching my mother-in-law's health decline. She is in her late 50's and has smoked since she was 14. Right now she looks about 70 and has emphysema and a horrible smoker's cough in the morning trying to clear her lungs.

You asked about us so a little background. I am 35 and married. Right now we are 45% stocks, 34% real estate (House and REIT), 10% bonds, 10% cash, 1% PM. We have no debt except our house and the mortgage will be paid off in 3 more years. We are also planning to take 1 year off per decade to travel and enjoy life, instead of making a list of things to do when we retire. Life has no guarantee so no retirement "bucket list" for us.

In my early 20's I had the attitude that I would live life to the max. I got married at 22, we bought a new truck for the wife and a used Porsche for me, a motorcycle, and a house. In less than a year I racked up 3x my yearly salary in debt. Then my company started laying people off and I got scared. A quick calculation said if I was laid off I could cover bills for 3 weeks and my wife had just started college. That is when we got serious about paying off debt and budgeting. I didn't get laid off but we lived on a strict budget. No cable, no vacations, and the Porsche and truck were sold and replaced with a less expensive reliable car for my wife while I rode the motorcycle. In the beginning we each had $20 of spending money per MONTH the rest was targeting at saving and paying off debt. We budgeted using an envelope system where at the beginning of the month each category's envelope was stocked with cash and when the cash was gone, it was gone. It took 4 years to dig out of the hole and pay off the consumer debt and student loans. When my wife graduated we started taking vacations and budgeting some more money for fun. However, we didn't upgrade our life when we went from 1 income to 2. Instead the extra money went to maximizing savings and debt payments.

You are ahead of were I was at your age since you don't have a huge debt burden to dig out of. You can focus on saving and investing instead of paying off debt. It starts will small steps and over time those small steps pay off in a big way.

This has been a great discussion. Reminds me of when I used to watch the Suze Orman show on Saturday nights with the wife. All great advice. Glad to see I am not the only one with debt around here :)

I was told I cant start a roth IRA because I do not get paid on the books. I work with a family business and we are at the point where my father is stepping back and I am moving forward. The deal was, once I got my license, we would legally split ownership so I would become co-owner legally, and I assume pay taxes and all that good stuff. I unfortunately didn't get my license last time around, going for it again in october and am very confident.

After HS I kinda jumped around jobs while going to county college. That lasted alittle bit but then I started helping out my father with his business part time, on the side. I started advertising heavily online and our business started growing rapidly and we became pretty successful in the sense that the business is supporting my father and myself along with another person.

I have high hopes and big plans for it once I take over because my father is not a good "business" man. Don't get me wrong, hes a great worker and he knows this trade inside & out, but as far as the paperwork end of things, its just not for him.

But thanks for everyone's advice!

I started investing in mutual funds when I got my first job out of college back in 2000. If you look at the history of the S&P500 you will notice that was the very top of the tech bubble. I have seen two huge crashes, one bottoming in 2003 and one in 2008. In fact the S&P 500 only passed that September 2000 high this year. In spite of those two crashes I'm still way ahead. The key is that I stayed in. Regardless of what the market was doing I bought index funds. Those shares I bought back in 2000 are finally worth what I paid for them and the ones I bought in 2003 and 2008 are worth way more than I paid. The one right financial move I made early on was to start saving 15% of my salary in a 401k. Even when we cut the budget to the bone to pay off debt and send my wife to school I still saved for retirement.

There were two ways people could lose money with mutual funds since I got in in 2000. The first was to freak out when the market dropped and sell. The second was to be too heavily invested in stocks close to retirement and have to sell in the downturn. My father did both. First, he was way too heavily invested in stocks for his age because he started saving in his 40's and was trying to catch up. When the market started tanking in 2000 he rode it all the way to the bottom in 2003 and then freaked out switched everything to fixed income. He then waited until 2004 to buy back in so he missed a lot of the recovery. He lost half of what he had in 2000 by selling in 2003 and only through even more aggressive saving was he able to get back to his 2000 level by the time he retired and cashed out in 2008.

Starting early allows one to avoid both of these problems. Having 30-40 years before you can access the money without penalty allows one to have the long term focus needed to stay in when the market is down. That early start also allows you to dial back stocks and move into less volatile investments as you age because you don't have the pressure to try to make up for lost time and stay aggressive.