What should people do at 25 to set themselves up for life? This would be very helpful!
Hi!
I know the usual saying...live below your means and save your money as much as possible, but what else can 25-year-olds do to set themselves up for life going forward? I grew up lower class and never had much, I want to make money and making money isn't really a problem. The problem is I want money to grow when I sleep. How does one accomplish that? I don't know what the fuck I am doing honestly. I know I should max out my retirement account with the highest contribution every year. Other than that, I've been studying the stock market and I don't know what the fuck to buy. Index funds, ETF's, individual stocks base on research? I want something to grow over time and it doesn't even have to grow a lot every year. If I can get like 5 to 6% return a year, I’m solid.
I don't want to live like my parents who busted their ass, and they got no retirement accounts, thankfully they got cash. That's all they fucking know, and it is cash. They don't invest nothing.
I am not with that. I need to grow my money! Anyone willing to share some general advice would be much appreciated! I started from the bottom and I’m trying to make it! For real, it's a struggle growing up the way I did. It's contradicting to say it but growing up broke and lower class is expensive. I have to learn every little shit by myself, and I got to literally scrap tooth and nail just to try and pull through. Thanks for hearing me out. A lot has been on my mind lately. I got tons of questions, but really no one to lean on for answers. So far, I have been loving the WSO community. Tons of great advice and posts on here! Wish I came across this in high school!
Hey The Forgotten Ape, what a lonely thread. I'm here since nobody responded ...so maybe one of these discussions will help:
More suggestions...
Fingers crossed that one of those helps you.
So I'm not 25 (22) but got a shit ton of money saved up from internships (35k) and even though investing sucks right now here's some options:
Stable coins: think of this as high yield saving accounts. If you put 1k it won't appreciate to 10k but does get an annual yield that's between 8-12% (ex blockfi or totalhodlnauts). It's safe and liquid. If you ever need your money you can sell it and transfer to your bank account.
Crypto: chasing those incredible returns without absolutely screwing yourself? Go into bitcoin and etherum. They are your safest options and have so much potential to grow. However, if you're emotional and check your investment worth everyday and cant handle down days, stay the hell away from this. It's a new and incredible field, but volitile.
Stocks: VGT, QQQ, VOO, SPY, Apple, Microsoft, Amazon and maybe semiconductors is all you need to know for investing.
Yes it's not significant amount by itself but guess what? It's more than enough to start real estate investing (fha loan) / throw in a 401k with an employer match that can grow INSANELY! I see nothing but potential and I'm gonna keep earning and investing.
In crypto sense, yes bitcoin and etherum are safe. Just because they are volatile doesn't make them more risky (unless you're timing the market). We are talking about the juggernauts of crypto who are established and got first mover advantage. If you ignore institutional adoption, countries starting accept bitcoin as its currency, etherum having billions of assets on its platform, that's on you homie.
The guy made it clear he was 22 and speaking from his experience at that age. You talk about him not having real experience.... but your post below shows you are 24 yourself.
I do think you are misunderstanding his post. By "safe" he may be comparing them to other cryptos, and in that sense - yes BTC and ETH are the safest options.
As per my investments:
I max out my 401k (half traditional, half roth). 6% employer match - traditional
I deposit monthly in a ROTH IRA (Not planning on maxing yet).
Another set of monthly deposits in TDAmeritrade (For any single stocks/option trading).
Rest of my paycheck (once expenses are taken care of) - I either invest in BTC/ETH - or if I don't plan on investing in the near term - I put it in GUSD at 8.05% Rate - better than any savings account.
Every extra cent you, just invest in vanguard total stock market index. Never take the money out and never stop contributing to it monthly, no matter what.
You will then have plenty when you’re retire.
The only issue is you won’t get rich fast. You will need years of compounding and it’s a boring way to invest. That’s exactly what my dad did, when he got his first paycheck as a broke college grad at age 28. He’s worth $5mm now and probably spent a million bucks on and my brother for our education and for the vast majority of his life his annual pay was never more than 125k.
Long term investing via low cost mutual funds isn’t sexy.
But it’s a fool proof way to retire a millionaire.
Thank you for sharing! I have been thinking about investing in vanguard and just keep contributing and calling it a day. Yeah, I get rich as fuck when I'm in my 50's and 60's, but fuck it. It's better than being 50/60 and broke as fuck. Plus, you are right. Someone in the family has to set themselves up for their future generation. My parents literally bought real estate in the 1990's and now have passive income every month without doing shit. They don't invest, don't know what the fuck is finance and all they know is cash. Thank god it worked out for them! But I can't follow that same path. I gotta grow a portfolio and use my age as an advantage. The earlier I start the more it compounds over time. Thanks, again.
Also health wise, if you want muscle do starting strength. Great beginner program that focuses on compound lifts. If you want testimonies or proof on my end I'd be happy to provide, I've deadlifting 495 lbs due to the base of this program.
If you just want to be healthy, jump rope 20 mins everyday, drink a gallon of water and eat healthy
Invest your money in low fee, broad market index funds (e.g. VOO). Since you're young keep yourself 100% or close to 100% exposed to equities. Obviously have some cash on set aside for emergency purposes (recommend 6 month's salary, but have also heard 1 year's salary if you're more risk averse). Allocate a small percentage of your portfolio to higher risk plays (crypto, leveraged ETFs, individual stocks, etc). Remember this though: the most important variables in the compound interest formula are the amount of time you compound for and the rate at which you compound. Everyone focuses on maximizing the latter, often times at the expense of the former. Time is the only thing money can't buy. Even Jeff Bezos is spending billions to try to live longer. Buffet made 99% of his fortune after the age of 65 or something like that. Take care of your health so you maximize the probability of living a long life. Health is wealth in its own right.
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