dknypinay i'd like to move out of my parent's abode
and buy a condo. quick facts about me: i have a
student loan $68/mo, car payment $400/mo,
cell phone bills $200/mo, 401k $100/mo,
life insurance $200/mo and make about $38K.
how much should i save for a condo thats $124,000?
any suggestions...
Wow...I was not going to respond to this message since
it is so old, but I will anyway.
There is much missing from your post; and, one heck of a lesson!
How old are you?
What is your degree?
Do you plan on going on to Graduate school?
Do you anticipate regular salary increases?
What do you anticipate as your salary ceiling?
What is the maximum you can contribute to your 401k
What is the maximum matching contribution rate of your employer?
What investment choices do you have within your 401k?
Have you established a ROTH IRA?
Are you healthy?
Are your parents and grandparents from healthy "stock"?
Are you covered by term insurance at work?
Are you covered by disability insurance at work?
Are you covered by health insurance at work?
Do you have an emergency fund of at least 3 - 6 months of after-tax income?
Are there marriage plans in the future?
If you died tomorrow, would anyone be hurting financially? How much and for how long?
You can review these books at www.amazon.com or obtain them free at your local
public library. If you read but one book I strongly suggest you read this one:
"Retire Early", by John F.Wasik (all of his books are excellent)
"What Wall Street Doesn't Want You To Know", by Larry E. Swedroe
"How To Make Money In Stocks", by William O'Neill
"What's Wrong With Your Life Insurance", by Norman F. Dacey
"Consumer Reports Life Insurance Handbook", by Jersey Gilbert, Ellen Schultz
"Bogle on Mutual Funds", by John C. Bogle
"Robbing You Blind", by Mark Dempsey
"Common Stocks and Uncommon Profits", by Philip A. Fisher
"Learn to Earn, by Peter Lynch
"The Coffeehouse Investor", by Bill Schultheis
"The Intelligent Investor", by Benjamin Graham
"Buying Stocks Without A Broker", by Charles B. Carlson
"The Fortune Tellers", by Howard Kurtz
You might want to add the following web sites to your favorites:
http://depts.washington.edu/balib/busref/busweb/catlist.cgi?catid=6
http://personal.vanguard.com/educ/inveduc.html
http://www.efficientfrontier.com/
www.nyse.com www.nasdaq.com www.amex.com
www.smartmoney.com www.insure.com www.bloomberg.com
www.kiplinger.com www.bankrate.com www.aaii.org/
www.investors.com/ www.better-investing.org/
http://www.oneshare.com/ is a good site, but you can buy shares for little cost
directly from many companies such as www.ge.com . Check out www.dripcentral.com also.
I would suggest that you learn about how fees effect the return on
your investments over the long haul. Some good sources are:
http://majestic.vanguard.com/FP/DA/0.1.cost_comp_intro
http://www.fundalarm.com
http://partners2.financenter.com/consumer/all_planning.fcs
I have prepared a spreadsheet assuming you are 25 - study it.
You have some decisions to make.
I would suggest that you cut your car expenses by 50%
at a minimum. Do you really need a cell phone?
Good luck to you.
$38,000.00 Annual income before tax
3,166.67 Monthly Income before tax
124,000.00 Condo goal
20% Ideal down payment
24,800.00 Ideal down payment
99,200.00 Ideal Mortgage
6.00% Interest
30 Term in years
Assuming you could purchase your Condo with a 20% down payment
your total monthly liabilities would be 49.35% of your income before
taxes
Your Liabilities less taxes, food, utilities & entertainment
$594.75 Monthly P&I 18.78%
68.00 Student loan 2.15%
400.00 Car payment 12.63%
200.00 Cell phone 6.32%
100.00 401k 3.16%
200.00 life insurance 6.32%
??????? Condo Insurance ?????
??????? Condo maintenance fee ??
??????? PMI (if down payment is less than 20%)
If you invested your monthly insurance premiums this could be the outcome.
Note: 4.5% is the typical guaranteed rate of return for insurance policies.
What did your "father" the salesman say you would have at age 55 and 65?
25 Current age 25 Current age
55 Age you want to retire 65 Age you want to retire
30 Years to save for goal 40 Years to save for goal
Investment Return Investment Return
4.5% $152,447 4.5% $269,236
6% $183,560 6% $349,804
7% $222,434 7% $459,198
8% $271,173 8% $608,544
9% $332,480 9% $813,452
10% $409,826 10% $1,095,866
11% $507,684 11% $1,486,705
12% $631,817 12% $2,029,613
13% $789,663 13% $2,786,307
14% $990,830 14% $3,844,203
15% $1,247,745 15% $5,327,299
Good Luck