Just looking for some financial advice from you wise-old-folks Anybody got any tips?

My Situation
Here's my situation. I'm 20 yrs old with a decent paying full-time job. I'm 3/4 of the way through my BS at Excelsior. I plan on going to grad school afterwards. (MA or Ph.D., haven't decided exactly what degree I want yet)

My Money's Situation
After my expenses, I'm left with approx. $18,000 a year to invest/save ($1,500 a month). As of today I have $15,000 sitting in a Charles Schwab Money Market (SW2XX) and another $5,000 in a Charles Schwab Mutual Fund (SWCGX).

I might need some of the money ($10,000 or so) in the near future to pay for my grad school (the rest I might be able to cover with a student loan), but other than that I will (hopefully) not need to touch this money at least until I need to make a down payment on a house (6 - 8 yrs from now).

My Questions
How should I invest my money? Should I open an IRA (Roth/Traditional)? Whats the best way I can take advantage of my situation (young age, low expenses)? Is it worth it for me to hire a financial consultant?

__________________
-Daniel

-------Degree Info---------
BS in Liberal Studies from Excelsior
AARTS - 30 ll
CLEP - 51 ll
DSST - 9 ul
ECE - 15 ul
ECE - 6 ll
ACTFL OPI - 3 ll
Total LL: 90 out of 90
Total UL: 24 out of 30 (6 left)
Grand Total: 114 out of 120 (6 left)

-------Next Up!-----------
2 UL ECE


Ani Yehudi!

No need for a financial consultant yet...IMO

But, I would definitely open the IRA and try to max that out. Not many things offer tax-free money and you can still invest it however you choose. The next would be to make sure you are utilizing any 401K options that you have with your employer...any matching?

__________________
Excelsior BS - General Business - 2008
Enrolled at Jacksonville State University - MBA - complete in 2010 (60% complete)

121 credits...ALL DONE BABY!!!

54 credits transfered in from prior college
54 credits by examination
6 credits from community college
3 credits from CSU-Pueblo (Operations Management)
4 credits for Information Literacy and Business Strategy from Excelsior

CLEP:
Principles of Macroeconomics (64)
Principles of Microeconomics (61)
Principles of Marketing (66)
Principles of Management (72)
Info Systems and Comp Applications (57)
Introductory Business Law (65)
Social Sciences & History (61)
DSST:
Principles of Supervision (58)
Principles of Statistics (67)
Introduction to Computing (60)
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Principles of Finance (55)
Money and Banking (52)
Ethics in America (66)
Management Information Systems (58)
ECE:
Ethics: Theory and Practice (B)
Organizational Behavior (C)

GMAT: 600

I would open a Roth IRA right now and max it out. You can contribute $4000/yr and any gains are tax free as long as you withdraw it after you turn 60 (I think)

With the economy sucking as it is, I'd do lots of research before you put your money into any kind of investment. You're doing good right now having it in a money market account. As far as investments go, T. Rowe Price has mutual funds specifically targeted for certain retirement years. Those are another thing you might want to look into.

There is a book called The Automatic Millionaire by David Bach that you should read. It has lots of info about compound interest, investing in real estate, etc.. It's a really good book and I would recommend it to anyone.

Just my two cents. Hope it helps

__________________
Jesse
BA in Liberal Studies, Thomas Edison State College, 2008

Here's a link to a great explanation about Roth and Traditional IRAs.

How to Choose Between Traditional And Roth 401k - Retirement Guide on Yahoo! Personal Finance

BTW, ever think about starting your own business?

__________________
I have 18 traditional credits and 51 exam credits. I've passed Introductory Sociology 76, Introductory Psychology 68, A&I Literature 66, Principles of Marketing 76, Introductory Business Law 71, Social Sciences & History 67, DSST Drug & Alcohol Abuse 450, Biology 69, Principles of Management 70, Natural Sciences 64, Intro to Business DSST 70, Principles of Macroeconomics 67, Principles of Microeconomics 58.

[quote=Danielp248]Just looking for some financial advice from you wise-old-folks Anybody got any tips?

My Situation
Here's my situation. I'm 20 yrs old with a decent paying full-time job. I'm 3/4 of the way through my BS at Excelsior. I plan on going to grad school afterwards. (MA or Ph.D., haven't decided exactly what degree I want yet)

My Money's Situation
After my expenses, I'm left with approx. $18,000 a year to invest/save ($1,500 a month). As of today I have $15,000 sitting in a Charles Schwab Money Market (SW2XX) and another $5,000 in a Charles Schwab Mutual Fund (SWCGX).

I might need some of the money ($10,000 or so) in the near future to pay for my grad school (the rest I might be able to cover with a student loan), but other than that I will (hopefully) not need to touch this money> at least until I need to make a down payment on a house (6 - 8 yrs from now).

My Questions
How should I invest my money? Should I open an IRA (Roth/Traditional)? Whats the best way I can take advantage of my situation (young age, low expenses)? Is it worth it for me to hire a financial consultant?[/QUOT



No matter what you do, no matter what path you choose- THE most important thing will be to have a retirement account going that you NEVER touch. Ever. When my husband and I were 25 we bought our first house and cashed out our 401s. We thought that having $6000 was so much use to us at that moment. It took us years until we built that back up, AND we will never regain the compound interest lost. Compound interest is your friend when you are young. Slow and steady contributions will have huge payoffs. At some point within this decade you will probably marry and maybe start a family- so your "extra" money won't be quite as much. My two cents say to put it away for retirement, because once you start a family, that is what sometimes gets neglected.

__________________
Jennifer
ALM, Master of Liberal Arts, Harvard University, 2099 or sometime sooner
AA & BA, Social Sciences, Thomas Edison State College, 2008
AOS, Culinary Arts, Culinary Institute of America, 1990

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I have a money market w/ charles schwab, too with less than $10,000 in it.
I don't recommend it at all! Poor rates, poor returns. I only see a good rate one month a year and that itself is still lower than CD rates.

What I do with my money (since I need flexibility) is I put it in 1 year CDs, or 6 month CDs, depending on rates and my needs when rollover time comes around. I can't do this forever but right now money flexibility on a rainy day is more important to me than a retirement that's more than 40 years away. I would, though, if your company matches it, go with that instead. Matching & maxing out is great. (if you go for CDs, go for short term for now because rates are not at their peak, so don't lock in for a 5 year CD until the yields are raised)

Also, no need for financial consultant..and try to stay away from stocks, especially if you don't know what your doing. I see way too many young adults risk their entire savings and losing it all, right before getting married and buying a home. If you go into stocks (which I don't recommend for you), take a course all about stocks first. My mother plays stocks - very well - but that's because she took a course, she knows what she's doing, and she calculates and diversifies! Diversification is always a good idea, no matter what type of money investment you enter.

__________________
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No More CLEPs left. I've taken them all!
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Others have given you some great advise. I also agree if you have employer match for a 401k take advantage of that with at least what they match. There are also many forums out there for financial ideas and knowledge. I look at this forum alot: FatWallet Forums - Finance they talk about any and everything finance related. Many people have posted similiar posts to yours.




Actually for 2008 its been raised to $5,000 for a Roth IRA contribution. I would also start this as soon as you can and plan on leaving it in there and not touching it until retirement.

$5,000? Nice. I didn't know that. Guess I'd better start increasing my contributions haha

__________________
Jesse
BA in Liberal Studies, Thomas Edison State College, 2008

Read Dave Ramsey's book NOW. Follow his advice. You are in the perfect position for life.

Amazon.com: The Total Money Makeover: A Proven Plan for Financial Fitness: Dave Ramsey: Books

__________________
Excelsior College
102 credits complete
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BS Liberal Studies
Area of Focus:Computer Information Science

Next test:
Rise and Fall of the Soviet Union (August 6th)

You could take 25 DSST tests or 27 CLEP tests for the price of 1 UoP class.

No way!!! I listen to Dave Ramsey everyday on talk radio.

__________________
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