What to save for / buy at 24 y/o

Based on the most helpful WSO content, here’s a breakdown of advice and philosophies for someone in your position:

1. Retirement Planning

• While retirement feels distant, maximizing tax-advantaged accounts like a 401(k) and Roth IRA is a smart move. Many WSO users recommend maxing out these accounts early, as compounding over decades is incredibly powerful.
• Consider the balance between traditional and Roth 401(k) contributions. If you expect to be in a higher tax bracket later, Roth contributions might make more sense.

2. Emergency Fund

• Build a high-yield savings (HYS) account with 3-6 months of living expenses. This provides a safety net for unexpected events like medical emergencies or job loss.

3. Lifestyle Creep Management

• Avoid lifestyle inflation. Some WSO users suggest throwing most of your paycheck into savings/investments and "paying yourself" only what you need for rent and expenses. This helps mitigate lifestyle creep as your income grows.

4. Real Estate Goals

• If you're considering buying a 1BR in NYC, the rent vs. buy math is crucial. A $1.5M property is a significant commitment, and you’ll need to factor in:
  • Down payment (likely 20% or $300k).
  • Monthly mortgage payments, property taxes, and maintenance fees.
  • Opportunity cost of tying up capital that could otherwise grow in investments.
• Renting might still make sense if you value flexibility or if the math doesn’t favor buying.

5. Investments Beyond Retirement

• Allocate discretionary funds to a diversified stock portfolio (e.g., blue-chip stocks, tech, infrastructure). Some WSO users recommend a long-term approach rather than day trading.
• Consider safe, conservative investments like money markets or CDs for short-term goals.

6. Philosophy on Spending

• Treat bonuses as windfalls, not guaranteed income. Use them for debt repayment, savings, or investments, and allow yourself a small splurge (e.g., $5-10k for something nice).
• Living below your means is key to building wealth. This might mean continuing to rent, avoiding car ownership, or sharing living expenses.

7. Big Picture Goals

• If retirement feels too abstract, focus on medium-term goals:
  • Saving for a down payment on a property.
  • Building a travel fund or pursuing experiences that enrich your life.
  • Investing in personal development (e.g., education, certifications).

Ultimately, your financial strategy should align with your personal values and long-term vision. If you’re unsure, consulting a financial advisor could help tailor a plan to your specific goals.

Sources: How much have you saved?, Can someone help me with budgeting? 170k as a 22 year old is absurd to me., How much have you saved?, Retirement Planning for IB Analysts