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Author: warrl Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5068  
Subject: Re: My first post! Date: 3/25/2004 2:42 PM
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I have the enviable problem of not knowing what to do with my money. I'm 28, single, no dependants. No debt outside of car & duplex. 6 months worth of E-fund in a MM act. I max out my 401/k, and I'm ineligible for the ROTH. I LBMM to a great degree and have between 2 and 3k per month to invest. Some of it goes into a regular trading account where I buy and hold.

My question is what do I do with that 2-3k per month to best achieve my FIRE goal?


You have a wonderful situation there.

But you don't say whether or not you've actually defined your goals, to the point that you can predict when you will reach them.

If you haven't done that, I'd say to:

(1) Define your goals
(2) Divide them in parts as appropriate - for example, predict, using assumptions you consider reasonable, how much you will get from Social Security, and plan to replace that income from the time you retire to the time you actually qualify to get it.
(3) Work with the calculator at http://www.early-retirement.org/fire/ to see where you need to be in order to be able to retire.
(4) Predict, using assumptions you consider to be reasonable, when you will be able to retire.

Now as for how to invest the money you have each month, there is absolutely nothing wrong with the long-term buy-and-hold investing you are doing.

However, you might want to open a conventional IRA (tax-deductible contributions to one are preferable to a Roth, for people who expect to retire noticeably before age 59; and ANYONE can make contributions to one - although those contributions may not be deductible - and shelter the growth from tax until withdrawal), and use it for some shorter-term investing. I use a couple mechanical strategies - see the Mechanical Investing board at http://boards.fool.com/Messages.asp?bid=100093
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