What advice would you give yourself if you were 27 again?

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WestUniversity
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Re: What advice would you give yourself if you were 27 again?

Post by WestUniversity » Fri Feb 02, 2018 2:16 pm

In a financial sense, save more and sooner...

In a philosophical sense...
1) Worry less
2) Take more risks

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dm200
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Re: What advice would you give yourself if you were 27 again?

Post by dm200 » Fri Feb 02, 2018 2:22 pm

My uncle's advice (when my aunt was not present) - "Marry a fat woman - then you know what you have and there are no surprises".

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Blister
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Re: What advice would you give yourself if you were 27 again?

Post by Blister » Fri Feb 02, 2018 2:43 pm

Keep the Toyota and don't buy the Datsun 280ZX. Put the $12000 into Apple stock instead. (1979)
Everthing works out in the end. If it doesn't then its not the end.

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Meg77
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Re: What advice would you give yourself if you were 27 again?

Post by Meg77 » Fri Feb 02, 2018 2:51 pm

comspe09 wrote:
Thu Feb 01, 2018 3:10 pm
  • If I stick w/ the Federal govt, I would be eligible for a pension when I retire. If I work until 62, based on the current computation rules, the pension would be roughly 45% of my salary. Due to this pension, I've seen a lot of talk about putting more money into a roth acct as opposed to a traditional acct. I've also learned more about RMDs and their impact on traditional accts. The first question is would you recommend contributing to a Roth acct? I considered doing a split between traditional and roth tsp this year: $9,250 traditional and $6,500 roth.
That's a lot of "if's" for a 27 year old. I'm only 34, but I've had 2 jobs since I was 27 - with big pay increases both times. Plus I got married. My estimated retirement has now zoomed up to age 40. But who knows, I could get pregnant with triplets tomorrow and become a stay at home mom, or start a business and want to work forever for myself, or who knows what else. Point being, I wouldn't plan on working the same job/career/employer indefinitely. Lots of people give up a lot of earning potential for the promise of a pension. Not saying it's always a bad idea, but don't stick with a job/boss you don't like just for the promise of anythingdecades away.

To answer your question simply, MAKE ROTH CONTRIBUTIONS. I wish I'd done more of that before my tax bracket increased. I did a lot of the stuff you're doing through my 20s - started in traditional, learned about roth, debated it for a year, did half and half for two years, then maxed out roth contributions only for a few years before getting some income boosts (individually and via marriage) which now make traditional contributions pretty much the only way to go again. Trust me, paying tax at 22% (which is what I think you're at, though it might be 24% if I'm missing something) and then letting the balance grow tax FREE for decades will be something you never regret, whether you end up with a pension or not. If you're making $95k at 27, it's a safe bet you'll be in much higher tax brackets sooner or later.
comspe09 wrote:
Thu Feb 01, 2018 3:10 pm
  • If I were to go with a Roth, what are the benefits to using a Vanguard Roth IRA for example vs. my Roth TSP? I understand at some point I can rollover the roth tsp into a roth IRA to avoid the RMD issue. I suppose the other benefits are expanded fund options in a Vanguard than what is available in the TSP but how important is that really?
Not much. I wouldn't bother with a separate account unless you want to since you have access to pretty good, cheap index funds and have additional Roth space in the 401k.
comspe09 wrote:
Thu Feb 01, 2018 3:10 pm
  • A short-term goal of mine (next 5-10 yrs) is to purchase a vacation condo in the Rocky Mountains that I could also use as a stream of income (Air BnB, VBRO, etc.). My current thought process is to max my trad TSP (or split trad and roth TSP equivalent to the max trad) and then down the road not feel bad if I use some of that money for a downpayment on this condo. I know this is generally discouraged, but I see it as an investment. Does this seems like an OK plan, or am I better off reducing my retirement contributions and placing this money into a taxable acct (or regular savings acct) to use for a downpayment down the road.
Do NOT plan to draw from your 401k for this. Why on earth would you do that? Paying a 10% penalty PLUS your tax rate is like borrowing at 32-34% to buy something (something that's primarily a luxury by the way). Unfortunately for you, you are a bit house poor and cannot currently afford to save much after putting 10% away for retirement (a non-negotiable) and maxing out your HSA (also a super great idea). So I would fund your short term goal (this one or any other that pops up) by doing the following:
1 - slash your budget and start adding to savings. Invest some of the funds once your cash reserves are over $35k or so.
2 - as your income increases over time, allocate additional cash flow to after-tax savings and investments.
3 - consider tapping your home equity if/when you want to buy another property. In 5-10 years you should be able to pull out a reasonable down payment via a home equity line of credit. Not ideal, but definitely better than depleting your retirement account.
comspe09 wrote:
Thu Feb 01, 2018 3:10 pm
  • Lastly, does it make sense to start investing my HSA funds? I'm with HSA Bank and there are only two options, and I think I'm leaning towards TD Ameritrade's free ETFs. Would it make sense to leave $10K in cash, and invest everything else into the market? The deductible is $1.5K and the catastrophic out-of-pocket max is $5K.
Yes. Keep your deductible in cash and then feel free to invest the rest. I invest slightly more conservatively in my HSA than my total AA would suggest in case I need to dip into the funds for a medical event in the near term. I picked a Vanguard Wellesley fund in mine (40% bonds, 60% stocks) to keep it simple since the balance isn't huge. It's a bit more expensive than 2 index funds, but barely.
"An investment in knowledge pays the best interest." - Benjamin Franklin

eldinerocheapo
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Re: What advice would you give yourself if you were 27 again?

Post by eldinerocheapo » Fri Feb 02, 2018 5:12 pm

What advice would you give yourself if you were 27 again?

When you meet............
Julie
Pam
Donna
Pat
Melissa
Maureen
& Jean...............

Run!

:oops: :oops: :oops: :oops:

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Will do good
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Re: What advice would you give yourself if you were 27 again?

Post by Will do good » Fri Feb 02, 2018 5:47 pm

You will live a lucky/charm life, don't worry so much.

Spend even more time with your wife and kids.

10x your position on Apple and don't sell any until 2.1.2018

chrismj
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Re: What advice would you give yourself if you were 27 again?

Post by chrismj » Sat Feb 03, 2018 9:41 pm

1) Max out your TSP - $18,500 this year.

2) MAX OUT YOUR TSP. (I'm a fed, too.)

3) Forget individual stocks. You already own a lot of Apple Facebook Amazon Google etc in your index/mutual funds. Plus, you are just speculating. Have you performed any analysis on their DCF's or have any idea what the current price reflects?

4) Get a hobby. You don't have to be passionate about it, just do something with your time. Your hobby could be trying out different hobbies.

5) Be a nice person. In a certain context, you are in the 99.9th percentile of the 7 billion people on this planet. And that status doesn't mean you need to offer advice or instruction, a lot of people just need your time so help out if you can.

6) Read as much history as you can, even if its Wikipedia. History doesn't repeat but it sure does rhyme.

7) you probably don't need all 12 of those beers in one night. You're probably good with like 5.

WanderingDoc
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Re: What advice would you give yourself if you were 27 again?

Post by WanderingDoc » Sat Feb 03, 2018 10:17 pm

dekecarver wrote:
Fri Feb 02, 2018 7:55 am
Cut back on the golf and goofing off and follow my dad's advise; make as much as you can, as fast as you can, so you can get out as soon as you can, if you choose to do so.
Would you say there is an optimal age to get out? ie. is there an age where its too early to get out? Myself contemplating early retirement in my mid to late 30s, will be giving up a $500-600K per year salary at my early peak earning years. Funny thing is, I am not at all burned out from work. I just realize that there is so much more to try, learn, and see - working full time won't allow one to do this.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

WanderingDoc
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Re: What advice would you give yourself if you were 27 again?

Post by WanderingDoc » Sat Feb 03, 2018 10:33 pm

comspe09 wrote:
Fri Feb 02, 2018 11:35 am
TSR wrote:
Fri Feb 02, 2018 10:39 am
To answer your specific questions:

1. If I were you I would do three things in your TSP (I'm a fed employee too, for what it's worth). First, go all in on the L2050 fund. This stops your urge to tinker, gives you a little (very little) bond exposure, and will evolve with you over time. Second, go all in on the Traditional TSP. There is a very well known article out there about how most federal employees will benefit from the Roth TSP due to their pension. That article has been highly criticized to the point of being almost debunked, but it still pops up. Take a look at this post, which addresses the federal situation specifically among other things: https://www.gocurrycracker.com/roth-sucks/. I'm not suggesting that it is immune to criticism either, but it'll give a little bit of perspective on that other article. Third, max that sucker out. That's what I'd tell 27-year-old me. Max it out. Forget about your condo, forget about everything else that isn't specifically bringing you joy these days, this is the single best use of your money right now. Don't forego a vacation or fun with your friends or whatever, but put as much as you can in.

2. Yes to the TD Ameritrade commission-free ETFs. I go 100% total stock and I never use my HSA, so the idea of keeping a decent amount of cash in HSA bank seems silly to me. It's just long-term investing for me.

Good luck!
Thanks! I'll definitely check out that post, because up until now I think I've only seen the other article that says Feds should be using the Roth TSP. What do you think about splitting the TSP between trad and roth? I've recently used my HSA for medical expenses but I'm thinking I may be better off just using cash and considering that HSA a long-term investment.
I split my TSP 50/50 traditional/Roth. Set it and forget it.

Other posters are telling you not to buy that condo. Remember what forum you are on. Buying coastal condos is THE #1 Reason that I am financially free in my 30s, and can choose not to work period any time (after service commitment). After >$1M in real estate equity, and >$4,500 in monthly net income from real estate. This took less than 5 years. It would take decades to achieve the same level of INCOME with securities. Just keep that in mind.

Other suggestion: travel as much as you can. It really is good for the soul, and I have learned the most about myself and the world while traveling, above all else.
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

macheta
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Re: What advice would you give yourself if you were 27 again?

Post by macheta » Sat Feb 03, 2018 11:08 pm

Pajamas wrote:
Thu Feb 01, 2018 6:16 pm
Say "yes" more often.
Say no more often

macheta
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Re: What advice would you give yourself if you were 27 again?

Post by macheta » Sat Feb 03, 2018 11:14 pm

wfisher wrote:
Thu Feb 01, 2018 3:34 pm
What advice would you give yourself if you were 27 again?
Nice job investing consistently for nine years. I would maybe take more direction towards learning to be a leader and improve communication. There are many interpersonal situations I didn't do so well in my career. I was lacking key skills.

Shikoku
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Re: What advice would you give yourself if you were 27 again?

Post by Shikoku » Sun Feb 04, 2018 1:34 am

Move to a good paying low-stress highly-secured job that you enjoy the most; do it even if you have to retrain yourself through additional education. For the rest of your life, you will not realize that you are working; it will be all fun!
"I don't worry too much about pointing fingers at the past. I operate on the theory that every saint has a past, every sinner has a future." -- Warren Buffett

Grt2bOutdoors
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Re: What advice would you give yourself if you were 27 again?

Post by Grt2bOutdoors » Sun Feb 04, 2018 1:45 am

Shikoku wrote:
Sun Feb 04, 2018 1:34 am
Move to a good paying low-stress highly-secured job that you enjoy the most; do it even if you have to retrain yourself through additional education. For the rest of your life, you will not realize that you are working; it will be all fun!
What job may that be?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

WanderingDoc
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Re: What advice would you give yourself if you were 27 again?

Post by WanderingDoc » Sun Feb 04, 2018 2:24 am

Grt2bOutdoors wrote:
Sun Feb 04, 2018 1:45 am
Shikoku wrote:
Sun Feb 04, 2018 1:34 am
Move to a good paying low-stress highly-secured job that you enjoy the most; do it even if you have to retrain yourself through additional education. For the rest of your life, you will not realize that you are working; it will be all fun!
What job may that be?
I'd like to know as well. Goes back to that old saying when it comes to cars: "Cheap, fast, and reliable - pick two!" Sounds that that guy thinks you can have all 3 :twisted:
Don't wait to buy real estate. Buy real estate, and wait. | Rent where you live, buy where others pay your mortgage for you.

dekecarver
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Re: What advice would you give yourself if you were 27 again?

Post by dekecarver » Sun Feb 04, 2018 9:06 am

WanderingDoc wrote:
Sat Feb 03, 2018 10:17 pm
dekecarver wrote:
Fri Feb 02, 2018 7:55 am
Cut back on the golf and goofing off and follow my dad's advise; make as much as you can, as fast as you can, so you can get out as soon as you can, if you choose to do so.
Would you say there is an optimal age to get out? ie. is there an age where its too early to get out? Myself contemplating early retirement in my mid to late 30s, will be giving up a $500-600K per year salary at my early peak earning years. Funny thing is, I am not at all burned out from work. I just realize that there is so much more to try, learn, and see - working full time won't allow one to do this.
This is a little more than just answering the the question:
I am not sure of an optimal age, I haven't gotten there yet, the key is to be able to say and live, "I''m done, as soon as I can, when I can". I kinda f'd off until about my mid 30s; I've worked/saved/invested all along the way but could have done more and 'potentially' be in an even better position now; and, my salary has never been north of $120K. Now in my early 50's, I realize I did alot of fun things back then while single, it wasn't time wasted but ...

Wanderingdoc, you are absolutely correct in saying there is so much more to try, learn etc.. and working full time won't allow it. I'm really saying that to myself again now that I am looking at a 12 year old who I want to expose to as much stuff as I can; life changes and it's not about me anymore, lol. My plan, to strategically use leave (I accumulate a lot and I really enjoy my work) to accomplish those things that I want to do with the family while maintaining full time employment.

Oh yeah, I still play golf, hunt, travel, etc... but I've found I can only do that so much to keep the feeling of enjoying it vs it becoming like work.

gilgamesh
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Re: What advice would you give yourself if you were 27 again?

Post by gilgamesh » Sun Feb 04, 2018 9:14 am

No advice, just a high five.

rocketdog
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Re: What advice would you give yourself if you were 27 again?

Post by rocketdog » Sun Feb 04, 2018 11:28 am

My advice to my 27-year-old self:

"Max out all your available retirement accounts every year, put 100% of it into low-cost broadly diversified stock market index funds (75% US, 25% foreign), and don't fiddle with it until you're less than 10 years from retirement."

If I had done that, I would have been able to retire in my 40s. :|

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sperry8
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Re: What advice would you give yourself if you were 27 again?

Post by sperry8 » Sun Feb 04, 2018 11:36 am

Take care of your body/health. You can ignore it today and it won't matter. But that is not true forever. And if you have to start later in life you will be way behind. Health is a long term play just like financial investing. If you start late to the game, it'll be MUCH harder to catch up. If you ever do.
Humbling BH contest results: 2017: #516 of 647 | 2016: #121 of 610 | 2015: #18 of 552 | 2014: #225 of 503 | 2013: #383 of 433 | 2012: #366 of 410 | 2011: #113 of 369 | 2010: #53 of 282

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Tycoon
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Re: What advice would you give yourself if you were 27 again?

Post by Tycoon » Sun Feb 04, 2018 11:44 am

Stop sitting in front of the computer for 10 hours a day.
Appeal to Pity:When pity is envoked to support a statement | Appeal to Popular Sentiment:Appealing to unrelated prejudices and attitudes | Hasty Generalization:Too little evidence to support the conclusion

Shikoku
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Re: What advice would you give yourself if you were 27 again?

Post by Shikoku » Sun Feb 04, 2018 11:48 am

WanderingDoc wrote:
Sun Feb 04, 2018 2:24 am
Grt2bOutdoors wrote:
Sun Feb 04, 2018 1:45 am
Shikoku wrote:
Sun Feb 04, 2018 1:34 am
Move to a good paying low-stress highly-secured job that you enjoy the most; do it even if you have to retrain yourself through additional education. For the rest of your life, you will not realize that you are working; it will be all fun!
What job may that be?
I'd like to know as well. Goes back to that old saying when it comes to cars: "Cheap, fast, and reliable - pick two!" Sounds that that guy thinks you can have all 3 :twisted:
It all depends on what someone enjoys the most and how he/she defines other parameters such as good pay, low stress, and job security. If someone enjoys working on cutting-edge science or technology, a research job in a federal government lab might be a good one. There are more. :happy Feel free to ask for a particular specialty.
"I don't worry too much about pointing fingers at the past. I operate on the theory that every saint has a past, every sinner has a future." -- Warren Buffett

dekecarver
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Re: What advice would you give yourself if you were 27 again?

Post by dekecarver » Sun Feb 04, 2018 11:57 am

This has been a really good thread IMOP. I'll just add from my experience; it's fine to plan and be in a planning mode but the bottom line is that just planning doesn't get it done, there is a point where you have to realize this and just start doing; a person only has so much time.

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