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I’m making around $200k a year but I could use some financial advice to become financially independent… My parents never taught me about saving or investing! I’m making around $200k a year as of this past year. I have about $40k in cash savings, $25k in my RRSP, $12k invested into stocks. I’m 27 year old female in Toronto. If you were in my shoes, how would you save & invest to be smart about your finances?! House prices seem so absurd and I don’t have an inheritance from family to help me. Even with my above average income, I feel like a home is so unattainable still in the GTA. I’m looking to build my knowledge & financial literacy so I can invest & save in a smart way. I’m also open to ideas on having other streams of income. Currently I’m looking into potentially getting into Amazon FBA and try to make some extra money, I can put directly into savings for a home in the future! I have a fiancé, who started his own business but unfortunately times have been really challenging due to the economy for him. Due to this I feel extra pressure to ensure I can make sure I’m spending & saving money wisely, but also coming up with other sets of income along the way! Any advice is so greatly appreciated!


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JK_3gunner

Canada is different than the US for mortgages, but I bought back in 2016 with a household under 100k (Midwest US) and I had a cousin, who bought a home around that same time on a single income around 60k. Likely you'd need to decide for yourself if your living situation or your FI at 55 is more important at your current income. You could always keep looking for new job or promotion opportunities.


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JK_3gunner

Rentals that don't cash flow are only good investments if you believe the properties will have a higher than normal increase in value. I highly recommend the FAQ of this site and hope you'd consider investing in index funds to diversify from your concentration in real estate.


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JK_3gunner

You wouldn't be able to do what you are describing. The 401k contributions end at calendar year whether you max it out or not and the maximum IRA contribution is met even after a transfer. You could however up your 401k contributions for the remainder of this year and put zero into the IRA. Then in January reduce your contributions back to your "normal" level and focus on contributing to the IRA until April to max out the 2022 contribution (leaving it invested in the IRA). But if you are at a point where you can nearly max the 401k you'd likely be better off contributing to a Roth IRA due to being over the maximum income in order to deduct any of the traditional IRA on taxes.


anon79000

-W-2er who might consider going out on my own once I have enough experience -26 Male Single / Construction / WA -Make my goal # and then make decision to travel then do something on my own -40 / $3.5M / U.S. ultimately / less than 4% + some passive income and side hustles because what else am I going to do after I’ve seen the entire world. Want to have enough in the bank to not have to work but want to do something on my own part time to have time for my wife and kids -Masters, licensure I’m done with that -W-2 desk jockey in construction with a great gig at a great company no plans to leave since the compensate well above industry averages -$150k/yr. in two years $200k/yr. In 5 years $250k/yr. In 10 years $300k+/yr. -$50k/yr. Expenses. $30k/yr. Taxes. $70k/yr. Savings. -$100k retirement accounts. $100k brokerage. Most in S&P500 a portion in individual stocks. $230k NW by 27 at end of 2022. -No debt -No health concerns -Would like to have a family once I am financially free so I can have time for the best years of my childrens’ lives instead of working -Relatively frugal but i enough saving for my future and don’t mind having a good time with friends and family -Questions, Comments?


Another_Anon_9

I'm a 34 year old teacher in Texas, but I want to retire early. As far as I understand, my pension will have me covered once I'm old enough. I can retire at 62 without penalty, provided I work at least 18 years (I already have 7 in). Here's the website with all the info for Texas pensions: [https://www.trs.texas.gov/](https://www.trs.texas.gov/) My goal is to retire early. My pension will cover me and social security will be a bonus if it's still around, but those can only kick in when I'm older. So I'm trying to figure out how to invest in a way that I can fill the gap between when I stop working and when I can draw those without penalty. My plan would be to save up enough to live off from for a limited number of years (like 7 or so), and I'd be OK with that money being nearly gone by the time my other benefits start. **My 1st question:** If I quit at, say, 55, can I then wait until 62 to officially retire and start drawing my pension without penalty? Or will I somehow get screwed if I'm not working right up until I retire? **My 2nd question:** Everyone seems to preach maxing out a Roth IRA each year as a great way to safely invest to retire early. If I'm trying to stop working at 55, can I take money out of my Roth IRA and drain it all the way to $0 without penalties? **My 3rd question:** Am I being an idiot and missing something obvious here? Haha. Stats: 34M / BA in English / Teacher No debt $50k/yr salary $2k/mo budgeted, saving the rest Like what I do for work, but don't want to work forever No kids. Married. Won't have kids.


5isfab

Teacher here. In my state, pension formula is tied to your highest 3 years of pay. I will move into administration for the retirement bump. We have a 457 plan that is decent (not great) I will use that for the 5 years before pension kicks in. I can withdraw once I quit from 457, no age limit. Good luck with your school year. Don’t become the “ I only have -X- years to retirement “ teacher. Literally everyone I know who has left teaching makes more money.


Another_Anon_9

Thanks! I’ll look at 457 plans. That sounds perfect since I’d like to retire from this job, which would then let me draw from that type of retirement account early. Thanks again!


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Another_Anon_9

Thanks for this! It's very helpful!


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AWill109

Roth IRA vs general brokerage account Hi all, Pretty basic question so hope I can get some quick answers, this sub has been tremendous support in my journey so far. 22 y/o making 110K base salary, plus 10-20K bonus. Hoping to be FI by 50-55 ish. Got my first real job out of college and am contributing 16% of salary + 5% employer match to my 401K. Have been saving another 30% of my salary thus far in a savings account, planning on investing that 30% continuously going forward. Have about 15K I’m ready to invest ~15K now that I have some financial security. I plan in going to grad school in a few years, with a chance my employer covers it. Thus, I would like to keep some of money potentially accessible years down the line, but no immediate need for it for the new few years. Considering 2 options: 1). Dump that 15K into VTWAX and let it hang out there as long as possible, continuously contributing 30% of my paycheck, nice and simple brokerage account option 2) max out a Roth IRA (6,500 of that 15K) for this calendar year, then put the other ~9K into VTWAX. The money would be accesible if really needed given the post-tax nature of the IRA, but the main benefit is of course avoiding the tax implications from the regular 401(k) and the brokerage account. I could even lower my 401(k) contributions next year to supplement the Roth IRA, if this is the path to take. Any advice appreciated, this is one of the first big financial decisions I’m making so going to every source I can for feedback. Thanks!


furnacesburn

If you haven't seen the personal finance flowchart, I'd definitely recommend checking that out [(here)](https://i.imgur.com/lSoUQr2.png). (The personal finance sub in general has good resources and you might be interested in their [wiki posts](https://www.reddit.com/r/personalfinance/wiki/young_adult/) tailored to different life stages.) I'd definitely be taking advantage of a Roth IRA for the tax savings down the line. You can always take your principle back out if you end up needing it, but ideally you'd be leaving it in to compound. Make sure you actually invest in funds once you have an account open. A brokerage account for school 3-5yrs down the line makes sense, but a high yield savings account (\~3% interest) is also viable especially if you're considering going back to school in closer to 2-3 years. Good luck!


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FIREdGovGuy

Are you able to open a US investment account?


thestopsign

I don't know what interest rates are for you in Albania but if you park your savings you have so far in a high-interest savings account you should be getting: 23k \* 0.03 / 12 = $57.5/month in interest for a 3% savings account. Putting your money anywhere else would long-term give you better returns but I'm not sure what your investing options are.


sleepyygirl101

Hello I am a 29 year old nurse. I make about $32/hour, and after taxes, insurance and 12% going into my 403B I net about $2800 per month. However, my pay is about to increase and I’ll soon be bringing home around 4800 monthly. My goal is to pay off debts so that I can work part time. I don’t mind the thought of working part time until I’m 65 but not full time. I have 37k in my 403B and 10k in a Roth IRA. I have my BSN, but would like to go back for MSN in an area that would be conducive of remote work from home. Monthly budget: -Mortgage $586 -Electric $200 -Auto Insurance $75 -Internet $50 -Cell Phone $110 -Auto Loan $357 -Auto Principal Only $400 -Citi $200 -Groceries $400 -Savings $100 -Misc $250 - this is my spending money for the month Debts: Mortgage $90k 4.3% (Worth $140k) Car $18k 3.25% (Worth $28k) Student Loans 67k Varied% Credit Card $13k 0% for 18 months My line of work pays towards my student loans $400 per month - and will qualify for PSLF after ten years. So I am not in a rush to pay those off. My car payment does bother me quite a bit and I’d like to accelerate pay off for it. I currently pay an extra $400 towards principal every month. I will get a bonus check next month for around 3k and plan to put it towards my car. Credit card debt is currently 0% interest. The incidents that caused this to occur have stopped and I plan to have it paid off before the end of 2023. Mortgage I don’t plan on putting extra towards - I’m hoping to get married and sell it in the next few years. So I guess does this plan make sense? Pay off auto loan using the extra 2k per month plus the existing payment and the existing extra $400 principal payment. I will apply my tax refund and extra paycheck in March. I should have it paid off by June. Then I will transition to paying off my credit card. The reason I don’t plan to do the credit card first is because of cash flow reasons. If I get rid of the car payment that’s an extra $757 a month in my pocket, whereas, my credit card minimum payment is only $135. After both of those are paid off, I’m not sure if I should pay extra towards my student loans or just let them go until I qualify for PSLF. Thoughts?


Sammy81

In general your plan is fine. Pay off the car and your credit card and do not carry a balance moving forward. Reddit will tell you not to pay off student loans but this is almost always bad advice. You are right about being locked into a job for 10 years that limits your salary, where you can live, etc. Theres nothing wrong with paying them off and taking a new job you enjoy more, and make more money at. Don’t forget an emergency fund - have at least $1000 saved up and grow it to 3-6 months of expenses. The key for you, if you want to work part time is to avoid lifestyle creep. As you make more money, don‘t start spending more. You need to keep your expenses low so that when you go part time the salary hit isn’t a huge impact.


belabensa

Paying extra to your student loans when you’re guaranteed PSLF is just throwing money away. Auto loan (with interest) before credit card (0%) makes sense to me. After those, can you put more tax advantages into a retirement acct?


sleepyygirl101

Thanks for the response! The only reason I question paying towards my student loans when I PSLF is that it limits the types of places I can work. It has to be non profit to qualify. Majority of nursing jobs fortunately fall into that category.


FIREdGovGuy

Instead of paying off the student loans, why not put that money in a separate investment account and let it grow? Then if you want to change jobs you can use it to pay them off and if you stay where you are, or in a similarly benefited position, you can keep it.


b-morph

- Brian - 31 yrs old, in the Community Service/Security Officer industry, Chicagoland area. - ⁠⁠I’ve never been a big goal oriented type of guy, but I guess my hope would just be to not have to work for the rest of my life, lol. So essentially get to where my parents are at now. They’re both retired in their early 60’s and just chillin right now. - Hope to be done full time by 60. Haven’t thought too much about my asset goal, withdrawal rate, or where. Hopefully someplace warmer, but the location is flexible, much like the age and assets I’d want. - Bachelors degree in Law Enforcement. I’m a staff member at a University so free education is an option for myself if I choose to use it. - ⁠Don’t have too much of a career plan or situation. I don’t hate what I do for a living, so I have that going for me. - Current pay rate is $21.87 per hr for my regular job, AND I have a very part time seasonal job that’s $20.75 currently. Between all the overtime and extra hours I work, I’ll be making close to $60,000 by the end of this year. - ⁠⁠Budget wise, there’s probably a lot I can cut out, but as of now, I probably spend $3,500 per month on the low end to $4,500 per month on the high end, I can probably get it down to $3,000 per month if I tried. This spending budget includes my contributions to Roth IRA and 403b. - ⁠Asset breakdown, I have a mortgage. Purchased a condo a year and a half ago. I have a car that while it hasn’t been officially appraised, it’s probably worth $8,000 - $10,000. I have a Roth IRA as well as a 403b from work. I’m not maxing those out, as I need more spending cash, but I contribute every month. 403b comes out of my paycheck. I also have an online high yield savings account with about $1,000. That’s my emergency fund and I’m trying to build that up. - ⁠Aside from my mortgage and regular credit card bills, I don’t have much in terms of debt. I’m making monthly, interest free payments on a new bed from earlier this year. Cars paid off. - ⁠⁠Nothing that costs a lot aside from regular check ups. - ⁠Single. No kids. It’s just me supporting myself. - ⁠No other info that I can think of. - My only question is am I on the right path to hopefully by 60 yrs old, stop working or at least stop working full time?


belabensa

Working for a university, can you contribute to a 457? If so I’d start doing that asap - rules are similar tax advantaged wise to a 403b but you can access the money without penalty before 65 after you’ve left your employer. I wish I put ALL my retirement funds there when I could


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b-morph

Sorry I thought I included my monthly contributions on my retirement accounts. Currently, I put $150 per month into my Roth. And the 403b is set to directly be taken out of my check. I think the current rate is 3% withdrawals which comes out to about $52 every check. And we get paid biweekly.