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Author: brewer12345 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81642  
Subject: Re: Retirement planning and other considerations Date: 8/21/2000 11:47 AM
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Like a lot of things, it depends on your income and your expenses. Presuming that you have at least some free income to play with, here's what I would do:

- Max out your 401k unless it is truly a dog (ie only offers company stock or high fee annuities). This will get you started and help with your taxes. You can always borrow against this money (as a last resort).

- Set up an emergency fund of 3 to 6 mionths of expenses, depending on your risk of losing your job and your ability to reduce expenses on short notice. Plunk this money into a money market fund.

- With any extra cash, start saving. What you do with it will depend on your circumstances. If you are starting a business, you'll need liquid money. If you are buying a home, then ditto. If you are working on your career and not really needing the cash, you can open a Roth and invest in a taxable brokerage account.

Realy think twice about buying your home right now. Consider your local real estate market carefully. If prices are over-heated, then keep paying your nice, low rent and pile up the cash. When prices correct, you'll be ready to pounce. My wife and I bought our condo just under 2 years ago when the local market was taking a breather. The market has since driven up prices about 75% (!). If I were looking right now, I'd put my money away and keep renting, personally.
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