How am I doing? (28yr old male)

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tpgst6
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Joined: Mon Sep 17, 2012 4:48 am

How am I doing? (28yr old male)

Post by tpgst6 » Mon Feb 02, 2015 1:58 pm

I plan on getting engaged in the next year and would like some advice on how I am doing, for now and in the future.

My information:
Salary: $55k +$20k in allowances (military)
Savings: $12k

TSP: $9k
Roth TSP: $18.5k
Roth Vanguard: $16k
Total: $43.5

Debt: $13k car loan @ .9%

Currently contributing ~$800/month (13%) into TSP and Roth TSP with another ~$800-1k/month going into savings. I can up the savings to $1,500 if I tighten things a bit.

She is 22 and will soon undertake $40k of student loan debt for a masters degree and come out in 2years making $45,000-$55,000.
Savings: $5,000
debt:
Student loans $11,000 @ 3.5%
Car: $11k @ 1.99%

Current plan is to pay off her student loans within 3years once she finishes school, almost everything she makes will go towards her loans.

Here is where I need some advice.
Future expenses within 3-4 years:
Ring: $6,500 roughly
Wedding: $15,000 roughly

Am I currently saving enough to make this feasible? Do I need to up the retirement savings? I have some major expenses coming up and I don't want to drop the ball on our long-term future to meet the current demands (maybe they need adjusting?). Worth noting is a $7k/year pay raise will be happening in 1-2years.

Thanks for the help.

Gropes & Ray
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Re: How am I doing? (28yr old male)

Post by Gropes & Ray » Mon Feb 02, 2015 2:07 pm

As one 28 year old male to another, please don't spend $6,500 on a ring. Your gift to your bride shouldn't be a financially irresponsible purchase. I know you love her, and an engagement ring that looks like a super bowl ring will show just how much, but I think it's pretty nice to show your fiancé that you love her by preparing for a financially secure future. When my wife told me that she was already doing the work of being a mother (bun in the oven), I told her I had been doing the work of being a father for years by making sure that we could afford everything we needed for our lifetimes. I think that meant more to her than the diamond ring she wears (which cost $630 dollars in 2009). Remember, most fights in marriages are caused by financial distress.

Also, I think $15k for a wedding is over the top, but I know it's pretty hard to stay under that these days.

Good luck, and congrats!

greatwall7
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Re: How am I doing? (28yr old male)

Post by greatwall7 » Mon Feb 02, 2015 3:41 pm

Why leave all your nest-egg at the mercy of Wall street? May I suggest the road less traveled.

Find yourself a small apartment building and invest in it. You can always hire a management company to help out with issues. You need something you can see and feel, rather than just paper profits.

Gropes & Ray
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Re: How am I doing? (28yr old male)

Post by Gropes & Ray » Mon Feb 02, 2015 4:09 pm

greatwall7 wrote:Why leave all your nest-egg at the mercy of Wall street? May I suggest the road less traveled.

Find yourself a small apartment building and invest in it. You can always hire a management company to help out with issues. You need something you can see and feel, rather than just paper profits.
No, don't do that.

Grt2bOutdoors
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Re: How am I doing? (28yr old male)

Post by Grt2bOutdoors » Mon Feb 02, 2015 5:38 pm

greatwall7 wrote:Why leave all your nest-egg at the mercy of Wall street? May I suggest the road less traveled.

Find yourself a small apartment building and invest in it. You can always hire a management company to help out with issues. You need something you can see and feel, rather than just paper profits.
OP - Don't listen to the post above.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Re: How am I doing? (28yr old male)

Post by Alex Frakt » Mon Feb 02, 2015 6:43 pm

greatwall7 wrote:Why leave all your nest-egg at the mercy of Wall street? May I suggest the road less traveled.

Find yourself a small apartment building and invest in it. You can always hire a management company to help out with issues. You need something you can see and feel, rather than just paper profits.
Sorry. The now ex-member above has a history of scams and spamming on other sites. We try to catch these at the first post, but sometimes they slip through.

z3r0c00l
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Re: How am I doing? (28yr old male)

Post by z3r0c00l » Mon Feb 02, 2015 6:53 pm

greatwall7 wrote:Why leave all your nest-egg at the mercy of Wall street? May I suggest the road less traveled.

Find yourself a small apartment building and invest in it. You can always hire a management company to help out with issues. You need something you can see and feel, rather than just paper profits.
Wow, can I pay you to tell me more?

poker27
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Re: How am I doing? (28yr old male)

Post by poker27 » Mon Feb 02, 2015 8:25 pm

Gropes & Ray wrote:As one 28 year old male to another, please don't spend $6,500 on a ring. Your gift to your bride shouldn't be a financially irresponsible purchase. I know you love her, and an engagement ring that looks like a super bowl ring will show just how much, but I think it's pretty nice to show your fiancé that you love her by preparing for a financially secure future. When my wife told me that she was already doing the work of being a mother (bun in the oven), I told her I had been doing the work of being a father for years by making sure that we could afford everything we needed for our lifetimes. I think that meant more to her than the diamond ring she wears (which cost $630 dollars in 2009). Remember, most fights in marriages are caused by financial distress.

Also, I think $15k for a wedding is over the top, but I know it's pretty hard to stay under that these days.

Good luck, and congrats!
I'm the same age as well, and recently engaged. I spent more on her ring, and will probably spend triple on the wedding (Chicago is expensive).

Neither a diamond or an expensive wedding are my things, however she wants it (as does the OPs SO). I have noticed a lot of people on this board mention that their wife doesnt want a diamond, fine getting married at the courthouse, ect. While they may not care about jewelry are large parties, other people do. You need to spend your $ on something, or it is just paper.

I do agree, do not overextend yourself, and have the conversations with her to make sure what she wants.

Gropes & Ray
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Re: How am I doing? (28yr old male)

Post by Gropes & Ray » Tue Feb 03, 2015 6:53 am

I understand some guys may not be able to avoid those expenditures. If you have to do it, at least don't borrow the money.

tpgst6
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Re: How am I doing? (28yr old male)

Post by tpgst6 » Tue Feb 03, 2015 7:50 am

Don't worry, I have no intentions of buying any real estate in the forseeable future, and when I do I'll be living in it.

I've explained to her the options of getting/not getting an expensive ring and she's lowered her expectations somewhat, so I see it as a healthy middle ground. It won't be financed, most I'll do is use a no-interst CC and pay it off before the due date, not even sure if it's worth that much trouble.

I feel if I'm able to save $1,000 a month and any extra goes into my Roth I'll be doing just fine.

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Toons
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Re: How am I doing? (28yr old male)

Post by Toons » Tue Feb 03, 2015 8:10 am

For starters
Debt: $13k car loan @ .9%
You have stable income(military)go ahead and pay off your car in a few months with some of your current savings and a portion of the 1500 per month you are now saving.

Car: $11k @ 1.99%-assist your future spouse in paying off her vehicle.

Ring: $6,500 roughly
Wedding: $15,000 roughly

If you are both convinced that is the amount you both need and want to spend on your marriage,in 4-6 years sounds great,save and pay cash. :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

tpgst6
Posts: 20
Joined: Mon Sep 17, 2012 4:48 am

Re: How am I doing? (28yr old male)

Post by tpgst6 » Tue Feb 03, 2015 1:57 pm

Toons wrote:For starters
Debt: $13k car loan @ .9%
You have stable income(military)go ahead and pay off your car in a few months with some of your current savings and a portion of the 1500 per month you are now saving.

Car: $11k @ 1.99%-assist your future spouse in paying off her vehicle.

Ring: $6,500 roughly
Wedding: $15,000 roughly

If you are both convinced that is the amount you both need and want to spend on your marriage,in 4-6 years sounds great,save and pay cash. :happy

Delaying the wedding which I will pay cash for, no question, to pay off a .9% loan (around $325 in total interest over 4yrs I believe) seems foolish to me.

On another note her parents are gifting the car to her, which is a huge help.

ddurrett896
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Re: How am I doing? (28yr old male)

Post by ddurrett896 » Tue Feb 03, 2015 2:56 pm

I'm 28 too...

I got married last year and I paid $11k for her ring ($19k appraisal) and paid $10,000 for our wedding. No regrets - I'd do it again in a second.

My only caution would be to not go into big debt for the sake of having a nice wedding. I'm sure a mortgage and kids will be here sooner than later!

Either wait and save, or have a smaller wedding. I'm not sure where you live, but we went all out and paid $10k. I HIGHLY recommend choosing a venue where you can bring your own alcohol. That can reduce the cost by a substantial amount.

DFWinvestor
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Re: How am I doing? (28yr old male)

Post by DFWinvestor » Tue Feb 03, 2015 4:18 pm

I don't see any red flags here. It seems like you are doing just fine and saving a decent amount. When you get your raise I would suggest putting at least 1/2 of that raise into investment accounts. You can increase your lifestyle a little bit but save 1/2 of it.

I personally do not believe your ring budget and wedding budget are excessive. It really depends on your personal level of comfort. You are going to spend close to 1/2 of your current net worth on the wedding ring and wedding day. That is a number some people would not be comfortable with. But if you are not yet engaged and these are projected expenses which will be 1-3 years in the future, your net worth should be higher by then and it will be a smaller percentage of your net worth.

While I am not a fan of outrageous wedding expenses, I don't think yours fit into this category and I also think in your 20's it is not necessarily a good way to live to look at these expenses as what percentage of your net worth they are. When your fiancee graduates and you are able to devote most (if not all) of her income to pay off student loans aggressively that alone tells me you are on the right path. Just keep fixed monthly expenses down until her loans are gone, and continue to save aggressively for retirement.

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austin14
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Re: How am I doing? (28yr old male)

Post by austin14 » Tue Feb 10, 2015 9:46 pm

Saw your post and figured I'd chime in. I think you're doing great! :happy Our situations look relatively similar so maybe I can offer you some advice because I just experienced most of what you described.

Investments: Looks like you're on the right track. At the beginning of the year I try to knock out the Roth IRA in one lump sum just to have it over and done. Then the focus goes towards maximizing the Roth TSP and etching away at those car loans. If you're going to deploy in the near future try to max out the Roth TSP early on in the year so you can take advantage of the additional TSP options. Obviously you'll need to double your TSP contributions to max it out this year but that's specific to what you can afford at the moment. I'm curious...why did you choose to invest partially in the traditional TSP?

Wedding ring: That's a bit more than I paid, but my wife absolutely loved it. If you know it's the right one, go for it. I went for quality and color over size; .8 carat if I remember right. I asked her on a cliff overlooking the ocean in Costa Rica. Wouldn't have done it any other way.

Wedding: My wife and I are in the same boat (I say wife because we already had a courthouse wedding). We managed to save about $16,000 for our upcoming BIG wedding over the past two years by juggling paying off car loans, monthly rent, investing for retirement, and traveling. It's a constant struggle to give equal attention to each of these but you figure out your rhythm eventually. I would recommend opening a high interest savings account for short-term savings for your wedding. We opened a joint account through Ally (1%) and add any discretionary funds we might have left over each month. If you know she's the one I'd recommend getting married on paper ASAP after your engagement in order to receive marriage benefits afforded to you by the military.

Loans: Obviously you need to put the focus of your efforts on the current (& future) student loans and eat away at that $24,000 in car loans steadily over time. You'll be digging yourself out of a hole for awhile with the upcoming $40,000 in student loans combined with the $24,000 in vehicle loans but once you're over that hump you'll be smooth sailing. With your income you'll be able to chip away at your loans steadily each year for the next 3-4 years until you have them paid down somewhat, at which time she'll be able to help out.

I would say keep doing what you're doing and try to up your net worth by ridding yourself of those liabilities and continuing to save as much as possible while you're in a low tax bracket. These are the years to practice frugality and set yourself up for success later down the road. Good luck with everything!

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