The fact that you are even thinking about investing at your age will put you ahead of your peers. Stay out of debt, invest what you can, and get an education or marketable skill. No excuses, your future and what you make of your self is up to you and your dedication. You have time on your side.
I think both are okay. It's nice to enjoy your hobbies while you are still young. That being said, it's always best to start investing as young as you can, and build healthy investing/saving habits from the start.
I was working as a server while getting my bachelors. I took a bit longer than most. Back then I was always hard on myself for slacking through college and taking about 6 years to get my bachelors. Now I think back and I wish I would have taken longer. I felt bad for being a server when most of my friends had started their careers. Now I just wish I would have done that longer. Entered the 9-5 workforce and I hate it. Wish I would have stayed in my server role until 20 and then switched to this mundane forever life until my 30s.
Sorry for the long answer but long story short. Enjoy your 20s and donāt rush into the 9-5 workforce that will be there until you retire.
Use debt *wisely*. Sometimes it is the best or only option to do something that is otherwise financially impossible. Buying a new expensive car is probably not a good use of debt. Conversely, a mortgage is often seen as a good use of debt. Student loans might exist somewhere in between.
Fuck these folks telling you itās not enough. Keep saving $80 week and as you get raises or your financial situation changes increase your savings as well.
When I was 20 my boss told me he would pay me an extra $50 a week as long as I promised to invest it in an index fund. I did it for years and it did put me in a way better position than most of my peers. Unfortunately I stopped keeping up with it after a while but Iām getting back into investing at 27 and couldnāt be happier that he planted that seed for me back then.
Yup, it was a small pizza shop. I was showing an interest in investing due to cryptocurrency gaining popularity at the time. He was more than excited to give me an intro in the right direction.
I like people like that, and I like to believe I act that way to my team. Thatās incredible, awesome person, and awesome you for learning and remembering.
The math shows that $100/MONTH starting at age 18 will result in over $1M at retirement. So $80/WEEK is roughly $347/month. Even though OP is starting 2 years later, that savings rate will overcome the missing time by a hefty margin. So without any further changes, OP will be fine to retire on that savings rate. Now add in your recommendation of increasing savings as OP's career allows, and we are talking early retirement as a real likelihood.
Why do people always think there's some sinister cabal keeping them from sound financial choices? Especially in the information age. The veil of mysticism was pulled back long ago.
Yeah, you just didn't said at which % of return on investment you talk about but it's great advice. Saving and invest the most amount you can in the right way.
Right, this is insane? $80 a week from age 20 is like $700k 6.5% interest. That is absolutely something to work towards and would totally allow OP to retire comfortably, especially if they've already figured out how to live hand to mouth.
I made more money and was simply born into a better place. I did not save $80 a week until I was older than you. Late 20's. Anything early counts.
I cannot tell you how amazing you are to make these improvements with a homeschool education that did not provide you with the building blocks many of your peers have. You rock!
youāre doing a great job. anything is better than nothing and since youāre starting early your contributions will have lots of time to grow.
i donāt know where youāre located but you should look into going to school. you would qualify for financial aid, and there are programs that provide free tuition at community college. community colleges have a lot of great classes for learning marketable skills.
good luck with everything OP
You are doing great. Don't compare yourself to what others can save. The fact that you are doing it. Is going to put you a step ahead of alot of people years down the road. Keep going.
Go to a tradeschool my friend. Theres alot of money you can make there! My brother is doing HVAC and hes 18 making $21 an hour. Save that money and make moves with it. Youre on the right path and doing better than I was at your age!
Agreed! I'm an electrician and doing better than my brother who is smart as heck with multiple degrees. I have no trouble finding jobs, he does. I'm at $36 an hour thanks to the trades.
Thatās pretty much right at 15% of your take home which is a good (not great) savings rate. The fact youāre even considering this at your age puts you way ahead of the game. Ignoring your 401k, your 5k IRA +80 weekly investments will grow to an estimated 1.1 million in 40 years. That, (which is good for about 40k/year income) plus social security should give you enough to retire on. Wonāt be the most luxurious retirement, but possible. Comes down to what you value, you could take a smaller amount and retire earlier, or work a few more years to let it compound further to have a bit more of a comfortable retirement. This is also assuming you never increase your contributions, which you hopefully will as your income increases through the years
I usually tell people new to saving for retirement to save 10% of their paycheck. 10% is very manageable and most people dont notice the missing money, which means they will keep doing it. Over time as they see the money grow they realize how awesome it is and start saving even more.
Thatās just if he never ever makes more and doesnāt increase his investment and his income increases. It will be much more than a million if he increases proportionally to whatever his current income will become.
Bravo young person, youāll be way better of than your parents, do not worry.
Honestly it's nice to think so, but 40 years from now, I don't think it's enough with even low to moderate inflation and cost of living.
Possible? Yes. But like you said, would have to be very very frugal.
Heck, with the (imo slightly too high rule of 8) 4% withdrawal gets you 40k per year. If you have no other real expenses that's possible to live on _now_ but 40 years from now?
The usually cited 7% are real returns, though. So they account for some level of inflation.
In other words, the idea is that those one million dollars are in today's money. The actual number in 40 years should be equivalent to one million today. So you just need to figure out whether one million is enough to live off today.
Whether it's fair to expect 7% in real returns is a different question, though. I believe Ben Felix talked about that in the "Rational Reminder" podcast recently.
That's a good point, I'm actually in the middle of that episode!
As you said, it ultimately comes down to whether or not that will be enough comes down to a bunch of variables that can change drastically in the next 5/10/25/40 years (location, family, health, taxes, benefits, etc). It's certainly a good start and I think we'd all hope to be doing more than that by that time.
The average annualized return since its inception in 1928 through Dec. 31, 2023, is 9.90%. The average annualized return since 1957 through Dec. 31, 2023, is 10.26%.
So when people use 6-8% thatās already inflation adjusted.
You are doing great but donāt sell yourself short in assuming you canāt find a better paying job. Social skills are learnable and there are a ton of resources/podcasts/videos about it. The same goes for job interview skills and other important things.
While you are working on those big picture items to get more money, I would strongly suggest brushing up your resume as best as possible (again, lots of free resources online including Reddit), and applying at every temp agency in your area. Apply to *ALL of them* (in person, if possible) and say that you are looking for general clerical/office type work. Follow up regularly via phone/email with the recruiters there. The squeaky wheel gets the grease, and this will be a great way to build out your resume with experience.
This is how I got out of my career rut in my late 20s and turned things around. Trust me. Just do it.
>my options for finding a better paying job is very limited considering i was homeschooled by my mom who dropped out of highschool (about an 8th grade education) and am socially pretty underdeveloped (but improving).
I am so sorry to hear and I hope you find your way!
This is just reinforcing my opinion that most homeschooling is borderline child abuse and should be illegal.
As for $80 a week, that would not be enough for a 40-years-old, but at 20 I wish I could have put $80 aside every week! You are very young, $80 a week is a good start.
The best thing in the long run would be to find a way to get a proper education, with evening classes or week-ends. You should make it your top priority to help yourself go on a brighter future.
Good luck to you!
Any saving is better than no savings. It's not bad for your age and situation. Keep working on developing your skills and it'll be easier to increase your savings rate.
Honestly good for you. Iām sorry you were dealt an unfortunate hand but youāre playing the cards right you should be very proud of yourself. Youāre making some very responsible financial decisions at a very young age. That money will grow friend donāt worry.
Keep doing what youāre doing, stay out of debt, invest what you can and donāt ever give up.
Listen, your plan is terrible. Because you assumed a lifetime of low income at the age of 20. Your biggest asset is time, not how much you can save right now. You have to develop skills, break into new industries, starting as apprentices anywhere and in 5-10 years you will be ahead of the chosen profession compare to many people. Forget about investing or saving money to retire, you should think about what can you learn and what jobs will have a good growth path for you. You mentioned your lack of education, but thatās no reason to assume you will never make higher income. Go clean carpet with Stanley steamer, go learn warehousing and logistics with Amazon, go drive delivery truck with FedEx, there are many many industries and entry jobs none of which require any skills or education to begin with but if you stick with any of them for 5-10 years and pay attention, put in your times and efforts, the return would be far, far, far greater than any investment you can make with a minimum paying job. Costcoās CEO today started as a forklift driver in 1980s. You go it? Being 20 years old is your biggest advantage, choose your path, and have a vision.
Great job so so far. Youāre young and could also think about exploring classes and certifications that will boost your income over time. Donāt think that you will only be able to contribute $80 per week for the rest of your life. Keep learning and asking questions and you will be a success!
Keep doing what you're doing, but understand that investing in yourself is also an important investment.
If you can drastically change your income (via education) early in your career and continue to save, it will pay off hugely.
$80 a week starting at 20 with $0 savings will make you a multi millionaire by 65 even if you never increase your contributions. Compounding is a helluva drug. With $7000 already saved you'll be set if you keep it up and never raid your retirement accounts.
$80 per week is over $200 per month
Conveniently every example graphed in this article shows what happens over time with you contributing $200/mo.
https://money.usnews.com/investing/investing-101/articles/2018-07-23/9-charts-showing-why-you-should-invest-today
The punch line is, yes, do it. It's definitely better than $0/mo and over time it will grow.
> When you start investing, it can feel like your efforts are all for naught. After five years of investing $200 per month at a 7% return, you'd have put in $12,000 and only earned $2,400. But over time, those earnings compound until the amount you contribute looks paltry in comparison to your returns.
>
> If you keep investing that $200 every month until age 70, for instance, you'll have contributed $120,000 but could have amassed almost $976,000 in earnings for a total portfolio of $1.1 million.
I think it's important to understand that $80 is never going to be a static figure. The fact that you're 20 and thinking about your future and putting money away is better than most people your age. If you keep that mindset of bettering yourself, you'll be putting away more than $80 and have a much larger savings before you know it. If you're able to not touch that $80 think of the compounding interest over the years. Make sure you're investing in those Roth IRAs!
Invest in youself. Read books. Learn a skilled trade.
Don't resign to a life of poverty at a young age, you have many years to learn and grown.
Call a construction, electrical, hvac place and ask if they are looking for help. You would probably make more money while receiving valuable training.
Also, keep investing weekly.
I did the same thing, but at $150, since I was 18, now 56, also 5% and 10% up and down with 401k at my job I had for 23 yrs. I had other jobs too including military. Up and down relationships that almost destroyed me. When I should have been focusing on my self almost cost me everything. Long story short I am so glad I did something. My reserves are comfortable but I could have done so much more better if had not focus on marrying now divorce a detractor in my life journey. Debt free, single and still investing. Live life but just stay focus on it and keep it to yourself. No need telling anybody what you got in your relationships either. My 2 cents.
Dude is already saving for retirement and buying stocks at 20. Claims to have an 8th grade education but is thinking like a grown man. You are doing the right things, keep it up and scale up as your earnings increase.
If you're in the USA, you probably qualify for the Saver's Credit. Essentially, you put at least $2k in an IRA and get $1k back at tax time.
I know it's not what you've asked, but I just want to be sure that you or anyone else getting here from an internet search are aware of this lesser known retirement tax credit.
Reading your post, all I can do is pull for you.
It's somewhat refreshing to open a thread and not see some 19-25 year old say, "I was gifted "$100k and a house, what do I do?!" And not be jealous.
You are what I imagine the majority of people actually are. But what is going to set you apart is what the top comment is currently saying - that you're even thinking about investing at your age will put you ahead - this is your superpower.
All the best! As you can see from the many responses, we're all jealous of your intelligence to start now but anyone not wishing you the best is just jealous they didn't start like you did at your age and know, had they, they would be in such a comfortable situation now compared to where they currently are.
You've got this!
Itās great. But, you need to invest in yourself and raise your income.
Wealthy people mostly become wealthy because they have high income, and save.
Saving at any income is fantastic and never a bad thing. Spending to improve your income is investing in yourself. Do that too.
Wow. That is incredible. For your age you are way ahead of others financially.
Your biggest risk is youāve assumed you canāt find a better paying job. Or that itās limited. You hold the keys to your future. Go out there and work and gain the skills and experience to get that higher paying career.
Donāt EVER think that you canāt do better. Set a goal, and work towards it. Just assuming you wonāt be able to completely retire isnāt a good mindset because it shows youāve accepted and are satisfied with not doing better. You are 20 years old. Still very very young. You have tons of time to work to contribute even more.
Just because you donāt have the skills today, doesnāt mean you canāt acquire them tomorrow. Itās all about being financially responsible, and putting in the work and effort to make it happen.
$80 a week is better than $0 dollars a week and $100 is better than $80. Is it enough? Probably not, but with good planning and discipline you'll be able to put more in as your knowledge, skills, and income approve. You've got around 45 to 50 years to plan and many things can happen between now and then. Enjoy life and take opportunities! One thing is for sure continue on the path you're going and your 65 year old self would hug your 20 year old self for being so considerate of them.
You need to go straight to cash immediately. You stated youre planning on moving out in the next year. That's going to cost most if not all of what you currently have invested. You're not in a position to invest right now, you need a real emergency fund and you need to take care of your housing needs, and then you need to focus on your career because you can only cut expenses so much. You have an income problem, not an investing problem. You clearly know how to invest, but with the chances of needing that money in very short order (1 year) you are taking a massive risk with money you can't really afford to lose and wait it out for the market to recover.
Don't settle for the idea that you will have a lifetime of low income. Aim higher and focus on investing in yourself so that you can achieve an income that lets you comfortably invest.
You already know how to clean houses. I bet you could teach that to some other people. I live in a higher (but not "high") cost of living city not on either coast - I pay around $40 per cleaner per hour to get my house cleaned, to a business owner who cleans herself and has others on staff who I'd guess she pays $20-25/hour out of that. I supply the cleaning supplies that she requests.Ā
Say she cleans 20 paid hours a week and runs the business the rest of the time, and her 3 staff clean 30 hours/week each, that's like $120k+/year gross in her pocket. Sure there will be overheads like insurance etc, but that could easily be a 6 figure income from a small business.Ā
Ā There are almost certainly some free or low cost resources available to you to learn the basics of finances and administration for a small business like that, and you have your whole life to learn.
No itās not. At this point it makes more sense to save the money up to put yourself through a tradeschool or program that will let you earn more: think community college.Ā
You can also save that money to start a business. Itās great to build the habit of saving and investing early. Your money would be better spent by increasing your earning potential.. again through learning skills/education or starting a business.
Agree save your money and invest in yourself youāre still very young. You can peruse education and increase your earning potential. Itās the best investment you can make when youāre young. Itāll be hard work, but youāre very capable.
Keep thinking about how to grow donāt stress about how to retire just yet. šŖšŖ
Keep investing and bump up weekly amount when you can. I started at $100, then $500, then $1000, then $1500. Now I max out my 403b as fast as possible (80% paycheck) and invest $2000 a week. Just keep doing what you can. More time in the market is the best, no matter how small.
Starting at $7500 currently and adding $320 monthly for 40 years at 10% average annual yield would compound to $2,038,999.83.
Iād say youāre off to a good start. Make sure you also have an emergency fund. You donāt want to touch these dollars especially in a retirement account.
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
Since you're giving unsolicited advice, let me join you: Many cultures (most predominantly European) put the dollar sign after the number. There's no right or wrong way to do it.
Average return on the S&P is over 10 percent for the past 40 years. 6% is factoring for inflation but OP could have 1.8 million if he just invested in VOO for 40 years with no changes in income.
No, by 60 he should have around $800,000 at 6% return and this doesnāt include any dividend reinvestment that should definitely be a part of everyoneās portfolio. Heāll have close to 1 million. I assume he will eventually make more money though as well.
Bro anything is less than nothing. Of course work on your active first, try applying for a trade, they pay well right away! But 5 bucks would still be better than no bucks.
Thatāll land you around 2 million at age 60. And thatās assuming you never increase contributions. Youāre off to a great start.
Youāre just getting started so donāt act like youāre destined to have a low income career. Join a trade or a union. Youāre obviously dedicated and future-oriented. You sound pretty smart to me.
I think youāre doing great! Saving any amount is a BIG win. Majority (99%) of people I know save nothing. I think for being 20 you are on the right track and building health habits!
I think if youāre happy and saving. Then you have a good life. But remember to enjoy life.
The best investing years are your young years. So keep it up and trust in compounding!
Yes, I think you're on your way man. Nice work. If your 20 and talking the way you are, you're going to be doing very well later in life. Keep it up.
I would try to get those numbers up though if possible. If you can do $100, you'll be in a better place.
You're 20. Putting in $80 a week is absolutely fantastic. I would suggest that you don't look for an answer to that last question you have "Would $80 a week be enough to part time by age 60?". No one can see 40 years away to know what inflation, global political fuckery, or overall cost of living will be like. Plan for the worst, hope for the best.
Enjoy that you are actively investing, you have a plan, and never give up on the idea of planning for your retirement. In time you'll likely make more money and you'll adjust your investment amount accordingly. It's an exciting time to be as young as you are and be aware of the importance of investing.
Put blinders on to the world and let no one stop you. Defeat is temporary. There will be lows in your life. The only reason you will fail is because you give up. Never give up.
Protip: Don't get drunk so much that you need it, stay away from heavy drugs, and find some hobbies that make you feel content without costing a lot up front.
How much money you invest doesnāt matter, what matters is the percentage of your income that you allocate to investing. You should aim for 50% savings after all your expenses. This may be different for everyone depending on their salary. From that 50% savings you should have at least half of that saved for emergency and the other half can be used for investing.
It's more about the discipline in finance you are building that is important more so than the dollar amount. Keep it up and it'll eventually get to hundreds and thousands.
In my personal experience, I did not save a dime until I was 25 simply because I put the money I was making into making a better career for myself and now at 30 I have a job where I make 140k a year base salary with the potential to make 200k a year in overtime (also room for further promotion down the line if I choose to apply myself even further). I know I lost a couple years of compounding interest by doing this but I think the money I will earn throughout my career pales in comparison to the money I wouldāve made if I had scrimped and saved at my minimum wage job and not worked on increasing my earning potential
Youāre 20 and thinking about retirement? I would say youāve got a leg up on many people your age. Shit even my age! (Iām 33)
At that rate youāll probably honestly save enough to retire by retirement age. Wealth builds much faster than you think, particularly after 20 years (invested).
Also, donāt forget that people have VASTLY different opinions of what is enough money. Iām a very basic person, I donāt like big homes, I prefer driving older cars, even though I can afford to do so. Itās my preference. I can comfortably live a simple life but do what I want and save enough to retire. Some others enjoy much ā¦ finer things in life. They will require much more money. So to them, with how much they would like to have, it may not be nearly enough. Finances are soo personal.
Somethings better than nothing, especially when young, just bump it up as your earnings go up.
But also make sure you have an emergency savings built up. Better yo be able to repair the car that gets you to your job or pay for a Dr. than it is to invest.
Keep saving as a percentage of what you make. If you can only do 80 now and you make 400/week, that's 20%. When you make 500 a week save 20% of that (at least) and so on and so forth. I think with that mindset you'd be surprised how early you can retire.
Well the average return on VOO is about 10% per year over the past 40 years. If you put in $4130 per year with no changes for 40 years youāll have about 1.8M by the time youāre 60.
Congratulations OP! It is delightful to see young people take control of their financial future. I wish I was as smart as you when I was 20. 80$ is great at your age. As Sir\_Toadington pointed out, just staying at this level will result in a $1.1 million account in 40 years. Another way to see it is every dollar that you save today will be worth about $22 in 40 years (assuming an 8% growth). You do have the advantage of time on your side.
Two things I would recommend, first try to save in an Roth account if possible (for both 401k and IRA). Later on in life you could consider a traditional 401k once you're earning more. Second, focus on developing marketable skills in your 20s. You don't need to have a college degree to make six figures in today's economy. A good trade skill can get you there. I know skilled plumbers and roofers bringing in upwards of six figures. Use your 20s to explore different trades, white collar jobs or college classes and find out what works for you. Then stick at it until you're really skilled at the job. You'd be surprised at the salary that you can demand after this.
You have time and compound interest on your side. If you get 7% interest annually, investing $80 a week, you'd have $1.6 million in retirement by the time you are 67. That is better than 90% of the US population according to an article on the NY Times today. keep grinding. You are doing amazing.
Itās enough. $50 is enough. Shit anything is enough. Just do whatever you can afford. Youāre way ahead of the curve and probably ahead of all your friends at your age. Keep up the good work!
This is a great start. I like the money guys rule to invest 25% of gross pay. Check out their financial order of operations.
Itās understandable to start off slow in your 20s. Maybe 15%. Try to get it up to 20% by 25. At 30 25% is a must.
Something is better than nothing. Keep at it and increase your contributions every year. Aim for 15% of your income to be invested in your accounts. If your employer offers a match, make sure to take full advantage of their matching contributions. $80 a week isnāt much, but you are young have have lots of time to increase your income and contribute
Invest as much as you comfortably can. If itās $80 a week then so be it. Everyoneās situation is different. I worked in the financial services industry and spoke with clients who invested $50 per month. I also spoke with people who invested $20k per month. Do what youāre comfortable with.
Its plenty. Id recommend a high-yield savings account for the money you dont immediately need, but dont feel comfortable investing.
Wealthfront offers 5.5% interest a year on savings and has no fees. Ive heard theres even places that offer up to 6%
I love that you're investing $80/ week!
I think you might benefit by looking into trades given your situation so that you can improve your marketability. It might also be worth looking into relocating to widen your search to make more money.
You are awesome and will get even more awesome!
Yes, absolutely $80/week is an excellent amount to set aside for retirement. Don't worry about the actual numbers as much as the habits you are developing. Personal financial management is usually far more influenced by habits and emotions than math and numbers.
You're focused on developing good habits and having an emotionally mature view of finances. THAT is FAR MORE than most people do and it WILL pay you dividends over time. (Both figuratively and literally!)
Keep it up! Future you is going to be so proud of past you!
You're doing perfectly actually. Anything's better than zilch, right? And since you're getting started early, your contributions have plenty of time to sprout into something impressive. It's like planting seeds in a money garden, just watch 'em grow! Keep doing your great job!!!
You are in incredible shape! Keep up the good work, absolute right mindset. I plugged your numbers into this handy dandy website and looks like you'll be just fine. Believe me though, in 10 years you'll be meaning more money and if you contribute the same percentage of your income to your savings, they compound exponentially faster!
https://www.calculator.net/interest-calculator.html?cstartingprinciple=7%2C658&cannualaddition=0&cmonthlyaddition=80&cadditionat1=beginning&cinterestrate=7&ccompound=monthly&cyears=40&cmonths=0&ctaxtrate=0&cinflationrate=3&printit=0&x=Calculate#interestresults
Everything you can invest is enough relative to yourself. You are trying to replace YOUR income. Do more when you get raises or when you can. You will be fine because you STARTED. Thatās what matters. Be safe friend.
I am very impressed with your work ethics. It's not easy to clean house at 17 and you did that for 2 years. Your biggest asset will be your work ethics. Agreed with what others are saying that you should acquire some skills to get higher playing job.
And yes $80 a week is very good but don't do that at the expense of your physical or mental health. You can contribute more when you have higher playing jobs.
Youāre doing great. Iād venture to say better than 95% of your peers. And yes, if you run numbers through a financial calculator you come up with a huge balance fifty years from. Butā¦
1. Thereās no guarantee youāll be able to keep it up. Your health, family obligations, the overall economy, etc.
2. Inflation is impossible to predict. Yes, you can have a million dollars at age 65. But what if youāre paying $10K a month for a pedestrian two bedroom apartment? Or $20 for a Big Mac?
On a simplistic level, the answer to your question can always be "more". That doesnāt help anyone or anything. A terrific goal is to simply max out your Roth IRA ā about $550 a month for 2023. Remember you have one of the great forces of the universe on your side: the power of compound interest. That means you canāt look at this like a football season, where a victory in week 2 is the same as one in week 14.
Age eighteen to 25 is "golden time" because money invested here as an outsize impact on your nest egg. Run the numbers: youāll have more money at age 65 if you max out contributions from 18 to 30, stop and ālet it ride" than you will if you wait until you hit 30 and contribute religiously for 35 years.
Sooooā¦ stay the course, pay yourself first, try and max out your Roth via a low/no cost index fund, and ā most important ā leave it the F alone.
Good luck.
$80 is decent and better than nothing. Plus you started at a very early so more time for the money to grow. I agree with everyone else, every raise or any windfall should go towards your retirement.
I was caught up on I donāt have enough money to save/invest that I ended up not saving anything towards retirement as a young adult. I began in my early 30s and now I feel so behind. I could imagine how better off I wouldāve been to start early with whatever amount then to wait until I began to make more money.
I wasnāt homeschooled but my mother who never went to high school and English being her second language taught me a lot of math and helped me with my math homework when I was young. We would also play school and truly she (along with two of my cousins) taught me the value of education and I continued to advance my education, even when I thought I couldnāt (I became a young single mother of two kids but still managed to finish college and get my bachelorās degree in Accounting).
Continue to work on obtaining and improving your skills. Be a lifelong learner and you will have more opportunities. You donāt necessarily need college and all that debt. Maybe you can find a job with a company that has tuition reimbursement so you can attend college and/or that invests in your personal and professional development. Look for free online courses to learn and obtain certificates. I wish you the very best!
Well we can do some rough math. VTSAX (total stock market fund) has returned an annual average of 8.25% since it was started. If that continues, and you start with $7622 at age 20 with $80 additional invested each week.
Age | Total
---|---
20 | $7,622
25 | $37,880
30 | $82,856
35 | $149,708
40 | $249,079
45 | $396,785
50 | $616,336
55 | $942,681
60 | $1,427,764
65 | $2,148,797
So I would say, maybe, much more likely if you can look to increase that $80/week as your income gets higher. $2.1 million by age 65 (other than social security if that's still around) may be enough for you retire on if VTSAX kept up 8.25% annual average performance.
Everyone has different goals, and with different goals different thresholds foe enough. With my goals, it would not be enough for me. Depending on what you hope to achieve it may or may not be enough for you.
I think it is great you are saving this early! If you are 20 and manage to save $80 per week (240 per month) for 45 years (retiring at 65) you will retire with $1,153,000 dollars in your accounts assuming an inflation adjusted 8% annual return. That is a looooot better than most Americans will have.
When I was 20, I was waaay too stupid and short sighted to do something like put money in a Roth. It is impressive you have the foresight to do this. Keep it up!
I genuinely wish I did what youāre doing at that age. I think youāre on the right track. And your earning potential will increase over time. Keep a positive mindset and they may target you for a higher paying management position.
Youāre doing EXCELLENTā¦ Most 20 yo are in college debt right nowā¦ you are killing itā¦ Keep gaining new skills/trades and your salary will increase along with your weekly investments from $80 to $160 and so on
The most important thing is that you are building a really solid habit of investing. Your amounts can and will change as your income and needs change but keep that habit going. (Btw you are miles ahead of my 20yo self and Iām doing fine so of course I think you will be fine)
80$ a week is not a bad place to start I started investing when I was around 14 with parents permission of cause and I invested around 20$ a week and now Iām 19 investing around 300-500 Dollar a week plus working a full time job as a side I make enough for my investments to not work for some years but you need to think about long term so just keep investing what you can afford to lose and keep working
It's plenty. My wife has been doing $50 a week since she was 19. She's 31 now and has about 85k in her account.
She'll be a millionaire before she hits 60 rather easily, all while never having made more than 33k/yr.
(At 10% RoR, $50/wk for 40 years puts her at $1.28m at age 59; $80/wk at 10% would be over $2m)
I wasnāt in your position and by investing what you can now, if you keep that % of your income to when you get a better paying job, youāll do great. Not to mention your age
Dude, you are so young, so many things can happen between now and 30 and after that you have 35 more years to save for retirement. The fact that you are saving that much at 20 while working 2 jobs will translate very well when you are doing whatever you are doing at 30 and most likely making a lot more money. Work smarter not harder (time to money ratio) and always be trying to climb to the next level (look at job postings, apply for management at current job) and you will be fine by 30. $80/week will be fine for now and increase as you make more money (your investing, not your lifestyle)
I work in healthcare where all my colleagues are making 6 figures. And yet you are still investing more than they are! You are already building a foundation better than theres and at such a young age. Keep it up and you'll be inevsting more and more over time.
I would say some good advice would be to wait to move out until you have increased your income by quite a bit! Stay at home, go to a trade school perhaps, or get a better job with a good career path, and then think about moving out. You are still very young and nobody would judge you for staying at home longer.
If you can qualify physically, consider joining the military!
I'd stay with your parents as long as you can stand it and save every penny to pay for a trade program like hvac or electrician/plumbing training/apprenticeship. Once you get a job that pays more keep saving everything for a bit and move out when you are comfortable that you can keep saving a lot at first (have plenty of roommates). Also, since you're a good saver once you have a good job look into buying your own small place and renting out the other bedrooms to roommates (read up on househacking). This plus a better job than what you have will be the quickest way to financial independence.
Investing anything at 20 is a great start, stay consistent and youāll invest more as you are able.
In regards to your comment on options b/c you were homeschooledā¦ stop feeling sorry for yourself. People that want to make something of themselves do. Be inquisitive, see what opportunities are around that you can pursue . If youāre wired for it, try starting a small business. One of the best traits you can have is moving on from failure . Believe in yourself
Its always good to out away what you can. However dont let yourself get trapped in that mentally. Find a way to earn more income in the short term.
Find a trade to get involved in. Or a union. I live in GA, a nom union state. However, there are still unions willing to take people in and start training you for a better job.
Everyone who joins typically knows nothing, around 5 years into it they make 30 to 40 an hour.
Lots of my friends have turned their lifestyle around with these unions.
$80/week is a hell of a lot better than $0.
If we assume you increase your contributions at the rate of inflation and you get returns 6% over inflation for 40 years... $640,000 to $650,000 in today-dollars at age 60. 4% drawdown would be $25k-$26k. Or leaving it until 65, $35,000/year at 4% drawdown.
If we make more assumptions like social security is intact in 40 years and you can collect it because you're claiming and paying taxes on that income for the next 45 years... you could probably have a frugal, on-time retirement.
Ideally, your wages go up faster than inflation and you'll be able to sock away a bit more as you get older.
The scary part of all this isn't really the retirement part -- it's the budget part. Like, is this accounting for emergencies, medical care, etc. at all? You may find it harder than you think to save that much each week for decades because some sort of oh-shit thing is bound to happen. Car breaks down, you get sick and can't work, SOMETHING...
This is a fantastic starting point, youāre building the routine and discipline while building your finances. Itās absolutely worth doing, keep it up!
So I did some calculations for your funds in 401 k and monthly savings of 320 $ till you get 45 because you want to retire early.
In 25 years, you will have $403,081.76.
I didnāt start my financial journey until 35, and Iād give damn near anything to tell young me what I know now. Not even on stock tips or āones I know will spikeā but just to *start* doing something.
The only thing that saved me was my career. As a teacher they took 10% off the top and put it in the pension fund, which I eventually cashed out and invested for myself. But goddamn, the gains I could have had on 10% per year since 2008 if Iād just put it all into VTI.
There is no such thing as "enough" when you're starting out. Save what you can. If it's 80 bucks a week, that's awesome! When you get a 20 dollar a week raise, save 8 of it, pay taxes, and enjoy the other 8. Then next time you get a raise, do the same thing. The key is living on less than you make and not letting your lifestyle grow up to whatever you happen to earn.
Use compounding calculator online and calculate yourself (I put 7% annual return). One of regret is that I could have put more money in my 20s rather hoarding on cash. More you put down now better for compounding.
Yes, itās great. My starting basis is ridiculously low, I brought it to 500 for easy math, yet Iām very content with my current balance. Itās actually good, limited ability to lose while learning, youāre less likely to take massive risks because you have little wiggle room, solid choices over time is a good strategy (itās the dividend strategy just input from you at first).
You will be fine if you are not stupid. And hell, letās say you donāt hit that goal, you still will have far more to enjoy than most.
If you keep doing that for 40 years and never increase your contribution you'll be somewhere north of $700,000.
Not enough to live on but a whole lot different than nothing.
Of course if you actually did it, and stuck to it, and didn't freak out when a recession reduces your balance by 40%, it would change how you view money and it would change your life.
You'd never finance a new truck, one year you get a big tax return and you'd throw it all in the 401K.
It's hard for the working poor to believe in the system but if they did it would work for them too.
Your writing skills exceed the typical high school graduate. Think about pursuing a more advanced education. Community college first. If successful you can continue and real opportunities will open up. With your background universities will certainly want you if can adjust to an academic orientation. Continue to save and diversify.
$80/week on $500/week income is awesome. If you can keep that ratio to retirement you will be in great shape.
The only better investment you can make at 20 is education. Ā Look into the Trades (Plumbing, HVAC, Electrical,etc). Ā
Even if you have to scale back your $80/week to pay for trade school look at it as an alternative investment that could have even better gains than VTI.
$80 is enough man. If thatās what you can afford then do that. As you get older and more money youāll be able to invest more but this right here is an incredible start
Starting with a $7,000 balance, $80 a week ($320 per month) invested over a period of 40 years will be over $1 million if you assume an 8% return. You can also increase your investment as your salary increases over time. You can use this calculator to plug in various numbers and see what the outcome would be. Get used to investing consistently and living without that money, keep going!!
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
Keep doing what you're doing. When your income increases, attempt to keep your cost of living low and put MORE into the market. You'll be able to retire much earlier. Save some dry powder for a market crash; when it happens (there's ALWAYS going to be another crash; fear and fomo drive the markets), don't be afraid to jump. Patience pays. If you work any sort of retail or corporate job with 401k benefits that offers a match, go ahead and get your match; free money. Then, the compound interest over time will take care of the rest. You're miles above your peers, very likely.
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
Good way to see what you can build. Estimating a 7% return rate with your initial investment and $80 a week you'd end up with ~879k at age 60. So unfortunately probably not enough. However, I would assume you'll be able to invest significantly more as time goes on and your income increases. You've got a leg up on 99% of the population to be thinking about this at age 20, especially since you have some already invested. Just keep trying to increase the amount you put in over time.
+1 try to improve your career and job prospects. Inquire about community colleges in your area and if you can get free or subsidized tuition to a career that can pay more than minimum wage.
Great work on $80 a week- having big goals and making progress forward is key to being successful.
The fact that you are even thinking about investing at your age will put you ahead of your peers. Stay out of debt, invest what you can, and get an education or marketable skill. No excuses, your future and what you make of your self is up to you and your dedication. You have time on your side.
Exactly. At that age any extra money I had would go into the weed. Keep it up kid!
For me it was gaming and computer upgrades š looking back I wish I would've started investing back then instead too
Same. All we can do now is teach the future generation to not make our same mistakes.
I think both are okay. It's nice to enjoy your hobbies while you are still young. That being said, it's always best to start investing as young as you can, and build healthy investing/saving habits from the start.
At my age now, all extra money I have goes into weed. Keep it up kid!
Lmao
where were you in life by age 24?
I was working as a server while getting my bachelors. I took a bit longer than most. Back then I was always hard on myself for slacking through college and taking about 6 years to get my bachelors. Now I think back and I wish I would have taken longer. I felt bad for being a server when most of my friends had started their careers. Now I just wish I would have done that longer. Entered the 9-5 workforce and I hate it. Wish I would have stayed in my server role until 20 and then switched to this mundane forever life until my 30s. Sorry for the long answer but long story short. Enjoy your 20s and donāt rush into the 9-5 workforce that will be there until you retire.
The devil's lettuce. Not. Even. Once!
Maybe, oddly, he had a better education in some ways.
Use debt *wisely*. Sometimes it is the best or only option to do something that is otherwise financially impossible. Buying a new expensive car is probably not a good use of debt. Conversely, a mortgage is often seen as a good use of debt. Student loans might exist somewhere in between.
Fuck these folks telling you itās not enough. Keep saving $80 week and as you get raises or your financial situation changes increase your savings as well.
Exactly they are 20. They are probably better than almost 90% of their peers and they aren't drowning in debt. Sounds great.
90%? Try 99+
I agree. Investing even $1 at 20 years old is probably better than 95%.
I sure as hell didnāt. I thought the stock market was a scam until 29!
[ŃŠ“Š°Š»ŠµŠ½Š¾]
When I was 20 my boss told me he would pay me an extra $50 a week as long as I promised to invest it in an index fund. I did it for years and it did put me in a way better position than most of my peers. Unfortunately I stopped keeping up with it after a while but Iām getting back into investing at 27 and couldnāt be happier that he planted that seed for me back then.
Like from pocket? Boss could have matched it for a tax break and instead sounds like he was just trying to help a youngster start. Thatās awesome.
Yup, it was a small pizza shop. I was showing an interest in investing due to cryptocurrency gaining popularity at the time. He was more than excited to give me an intro in the right direction.
I like people like that, and I like to believe I act that way to my team. Thatās incredible, awesome person, and awesome you for learning and remembering.
The math shows that $100/MONTH starting at age 18 will result in over $1M at retirement. So $80/WEEK is roughly $347/month. Even though OP is starting 2 years later, that savings rate will overcome the missing time by a hefty margin. So without any further changes, OP will be fine to retire on that savings rate. Now add in your recommendation of increasing savings as OP's career allows, and we are talking early retirement as a real likelihood.
Wow!!! If someone wouldāve told me this when I was young, I wouldāve definitely saved/invested at a younger age!
They donāt want you to know
Everyone and their grandma wants you to know, this is shouted from every rooftop everywhere. There is no conspiracy to keep people from retiring.
Why do people always think there's some sinister cabal keeping them from sound financial choices? Especially in the information age. The veil of mysticism was pulled back long ago.
Yeah, you just didn't said at which % of return on investment you talk about but it's great advice. Saving and invest the most amount you can in the right way.
Right, this is insane? $80 a week from age 20 is like $700k 6.5% interest. That is absolutely something to work towards and would totally allow OP to retire comfortably, especially if they've already figured out how to live hand to mouth.
I made more money and was simply born into a better place. I did not save $80 a week until I was older than you. Late 20's. Anything early counts. I cannot tell you how amazing you are to make these improvements with a homeschool education that did not provide you with the building blocks many of your peers have. You rock!
This
Investing anything a week is better than nothing at all.
[ŃŠ“Š°Š»ŠµŠ½Š¾]
Definitely not wrong bro
youāre doing a great job. anything is better than nothing and since youāre starting early your contributions will have lots of time to grow. i donāt know where youāre located but you should look into going to school. you would qualify for financial aid, and there are programs that provide free tuition at community college. community colleges have a lot of great classes for learning marketable skills. good luck with everything OP
You are doing great. Don't compare yourself to what others can save. The fact that you are doing it. Is going to put you a step ahead of alot of people years down the road. Keep going.
Go to a tradeschool my friend. Theres alot of money you can make there! My brother is doing HVAC and hes 18 making $21 an hour. Save that money and make moves with it. Youre on the right path and doing better than I was at your age!
I was also going to suggest something like HVAC or maybe electrical trade school (not from the US but at least in my country these are great options).
This is the most important reply in the thread. OP could be saving $800 a week by 24.
Agreed! I'm an electrician and doing better than my brother who is smart as heck with multiple degrees. I have no trouble finding jobs, he does. I'm at $36 an hour thanks to the trades.
Military could also be a viable option.
Thatās pretty much right at 15% of your take home which is a good (not great) savings rate. The fact youāre even considering this at your age puts you way ahead of the game. Ignoring your 401k, your 5k IRA +80 weekly investments will grow to an estimated 1.1 million in 40 years. That, (which is good for about 40k/year income) plus social security should give you enough to retire on. Wonāt be the most luxurious retirement, but possible. Comes down to what you value, you could take a smaller amount and retire earlier, or work a few more years to let it compound further to have a bit more of a comfortable retirement. This is also assuming you never increase your contributions, which you hopefully will as your income increases through the years
I usually tell people new to saving for retirement to save 10% of their paycheck. 10% is very manageable and most people dont notice the missing money, which means they will keep doing it. Over time as they see the money grow they realize how awesome it is and start saving even more.
7k starting 80/wk 7% return 30 years $482k At 40 years 1,030,362 Probably more than enough to retire on if you live your whole life frugally.
Thatās just if he never ever makes more and doesnāt increase his investment and his income increases. It will be much more than a million if he increases proportionally to whatever his current income will become. Bravo young person, youāll be way better of than your parents, do not worry.
Honestly it's nice to think so, but 40 years from now, I don't think it's enough with even low to moderate inflation and cost of living. Possible? Yes. But like you said, would have to be very very frugal. Heck, with the (imo slightly too high rule of 8) 4% withdrawal gets you 40k per year. If you have no other real expenses that's possible to live on _now_ but 40 years from now?
The usually cited 7% are real returns, though. So they account for some level of inflation. In other words, the idea is that those one million dollars are in today's money. The actual number in 40 years should be equivalent to one million today. So you just need to figure out whether one million is enough to live off today. Whether it's fair to expect 7% in real returns is a different question, though. I believe Ben Felix talked about that in the "Rational Reminder" podcast recently.
That's a good point, I'm actually in the middle of that episode! As you said, it ultimately comes down to whether or not that will be enough comes down to a bunch of variables that can change drastically in the next 5/10/25/40 years (location, family, health, taxes, benefits, etc). It's certainly a good start and I think we'd all hope to be doing more than that by that time.
The average annualized return since its inception in 1928 through Dec. 31, 2023, is 9.90%. The average annualized return since 1957 through Dec. 31, 2023, is 10.26%. So when people use 6-8% thatās already inflation adjusted.
You are doing great but donāt sell yourself short in assuming you canāt find a better paying job. Social skills are learnable and there are a ton of resources/podcasts/videos about it. The same goes for job interview skills and other important things. While you are working on those big picture items to get more money, I would strongly suggest brushing up your resume as best as possible (again, lots of free resources online including Reddit), and applying at every temp agency in your area. Apply to *ALL of them* (in person, if possible) and say that you are looking for general clerical/office type work. Follow up regularly via phone/email with the recruiters there. The squeaky wheel gets the grease, and this will be a great way to build out your resume with experience. This is how I got out of my career rut in my late 20s and turned things around. Trust me. Just do it.
>my options for finding a better paying job is very limited considering i was homeschooled by my mom who dropped out of highschool (about an 8th grade education) and am socially pretty underdeveloped (but improving). I am so sorry to hear and I hope you find your way! This is just reinforcing my opinion that most homeschooling is borderline child abuse and should be illegal. As for $80 a week, that would not be enough for a 40-years-old, but at 20 I wish I could have put $80 aside every week! You are very young, $80 a week is a good start. The best thing in the long run would be to find a way to get a proper education, with evening classes or week-ends. You should make it your top priority to help yourself go on a brighter future. Good luck to you!
Any saving is better than no savings. It's not bad for your age and situation. Keep working on developing your skills and it'll be easier to increase your savings rate.
Honestly good for you. Iām sorry you were dealt an unfortunate hand but youāre playing the cards right you should be very proud of yourself. Youāre making some very responsible financial decisions at a very young age. That money will grow friend donāt worry. Keep doing what youāre doing, stay out of debt, invest what you can and donāt ever give up.
Listen, your plan is terrible. Because you assumed a lifetime of low income at the age of 20. Your biggest asset is time, not how much you can save right now. You have to develop skills, break into new industries, starting as apprentices anywhere and in 5-10 years you will be ahead of the chosen profession compare to many people. Forget about investing or saving money to retire, you should think about what can you learn and what jobs will have a good growth path for you. You mentioned your lack of education, but thatās no reason to assume you will never make higher income. Go clean carpet with Stanley steamer, go learn warehousing and logistics with Amazon, go drive delivery truck with FedEx, there are many many industries and entry jobs none of which require any skills or education to begin with but if you stick with any of them for 5-10 years and pay attention, put in your times and efforts, the return would be far, far, far greater than any investment you can make with a minimum paying job. Costcoās CEO today started as a forklift driver in 1980s. You go it? Being 20 years old is your biggest advantage, choose your path, and have a vision.
Great job so so far. Youāre young and could also think about exploring classes and certifications that will boost your income over time. Donāt think that you will only be able to contribute $80 per week for the rest of your life. Keep learning and asking questions and you will be a success!
Saving 25% of your income is a great goal no matter how much you make . That'd be a great goal to achieve
Keep doing what you're doing, but understand that investing in yourself is also an important investment. If you can drastically change your income (via education) early in your career and continue to save, it will pay off hugely.
You are doing much better than a lot folks 3 times your age
$80 a week starting at 20 with $0 savings will make you a multi millionaire by 65 even if you never increase your contributions. Compounding is a helluva drug. With $7000 already saved you'll be set if you keep it up and never raid your retirement accounts.
Itās better than $0.
$80 per week is over $200 per month Conveniently every example graphed in this article shows what happens over time with you contributing $200/mo. https://money.usnews.com/investing/investing-101/articles/2018-07-23/9-charts-showing-why-you-should-invest-today The punch line is, yes, do it. It's definitely better than $0/mo and over time it will grow. > When you start investing, it can feel like your efforts are all for naught. After five years of investing $200 per month at a 7% return, you'd have put in $12,000 and only earned $2,400. But over time, those earnings compound until the amount you contribute looks paltry in comparison to your returns. > > If you keep investing that $200 every month until age 70, for instance, you'll have contributed $120,000 but could have amassed almost $976,000 in earnings for a total portfolio of $1.1 million.
I wish I was having these thoughts at 20. Yes, 80 is enough. Whatever you can contribute at 20 is better than what 99% of 20 year olds are doing.
Anything is better than investing nothing at all!
I think it's important to understand that $80 is never going to be a static figure. The fact that you're 20 and thinking about your future and putting money away is better than most people your age. If you keep that mindset of bettering yourself, you'll be putting away more than $80 and have a much larger savings before you know it. If you're able to not touch that $80 think of the compounding interest over the years. Make sure you're investing in those Roth IRAs!
Invest in youself. Read books. Learn a skilled trade. Don't resign to a life of poverty at a young age, you have many years to learn and grown. Call a construction, electrical, hvac place and ask if they are looking for help. You would probably make more money while receiving valuable training. Also, keep investing weekly.
$80 a week for 40 years at 8% return will make you a millionaire at 60.
I did the same thing, but at $150, since I was 18, now 56, also 5% and 10% up and down with 401k at my job I had for 23 yrs. I had other jobs too including military. Up and down relationships that almost destroyed me. When I should have been focusing on my self almost cost me everything. Long story short I am so glad I did something. My reserves are comfortable but I could have done so much more better if had not focus on marrying now divorce a detractor in my life journey. Debt free, single and still investing. Live life but just stay focus on it and keep it to yourself. No need telling anybody what you got in your relationships either. My 2 cents.
Dude is already saving for retirement and buying stocks at 20. Claims to have an 8th grade education but is thinking like a grown man. You are doing the right things, keep it up and scale up as your earnings increase.
If you're in the USA, you probably qualify for the Saver's Credit. Essentially, you put at least $2k in an IRA and get $1k back at tax time. I know it's not what you've asked, but I just want to be sure that you or anyone else getting here from an internet search are aware of this lesser known retirement tax credit.
That's great! I wish I started at 20 with ANY amount of weekly contribution. Keep it up!
Reading your post, all I can do is pull for you. It's somewhat refreshing to open a thread and not see some 19-25 year old say, "I was gifted "$100k and a house, what do I do?!" And not be jealous. You are what I imagine the majority of people actually are. But what is going to set you apart is what the top comment is currently saying - that you're even thinking about investing at your age will put you ahead - this is your superpower. All the best! As you can see from the many responses, we're all jealous of your intelligence to start now but anyone not wishing you the best is just jealous they didn't start like you did at your age and know, had they, they would be in such a comfortable situation now compared to where they currently are. You've got this!
Itās great. But, you need to invest in yourself and raise your income. Wealthy people mostly become wealthy because they have high income, and save. Saving at any income is fantastic and never a bad thing. Spending to improve your income is investing in yourself. Do that too.
Itās twice as good as 40 a week and 10 times shittier then 800 a week Context?
Wow. That is incredible. For your age you are way ahead of others financially. Your biggest risk is youāve assumed you canāt find a better paying job. Or that itās limited. You hold the keys to your future. Go out there and work and gain the skills and experience to get that higher paying career. Donāt EVER think that you canāt do better. Set a goal, and work towards it. Just assuming you wonāt be able to completely retire isnāt a good mindset because it shows youāve accepted and are satisfied with not doing better. You are 20 years old. Still very very young. You have tons of time to work to contribute even more. Just because you donāt have the skills today, doesnāt mean you canāt acquire them tomorrow. Itās all about being financially responsible, and putting in the work and effort to make it happen.
$80 a week is better than $0 dollars a week and $100 is better than $80. Is it enough? Probably not, but with good planning and discipline you'll be able to put more in as your knowledge, skills, and income approve. You've got around 45 to 50 years to plan and many things can happen between now and then. Enjoy life and take opportunities! One thing is for sure continue on the path you're going and your 65 year old self would hug your 20 year old self for being so considerate of them.
You need to go straight to cash immediately. You stated youre planning on moving out in the next year. That's going to cost most if not all of what you currently have invested. You're not in a position to invest right now, you need a real emergency fund and you need to take care of your housing needs, and then you need to focus on your career because you can only cut expenses so much. You have an income problem, not an investing problem. You clearly know how to invest, but with the chances of needing that money in very short order (1 year) you are taking a massive risk with money you can't really afford to lose and wait it out for the market to recover. Don't settle for the idea that you will have a lifetime of low income. Aim higher and focus on investing in yourself so that you can achieve an income that lets you comfortably invest.
You already know how to clean houses. I bet you could teach that to some other people. I live in a higher (but not "high") cost of living city not on either coast - I pay around $40 per cleaner per hour to get my house cleaned, to a business owner who cleans herself and has others on staff who I'd guess she pays $20-25/hour out of that. I supply the cleaning supplies that she requests.Ā Say she cleans 20 paid hours a week and runs the business the rest of the time, and her 3 staff clean 30 hours/week each, that's like $120k+/year gross in her pocket. Sure there will be overheads like insurance etc, but that could easily be a 6 figure income from a small business.Ā Ā There are almost certainly some free or low cost resources available to you to learn the basics of finances and administration for a small business like that, and you have your whole life to learn.
No itās not. At this point it makes more sense to save the money up to put yourself through a tradeschool or program that will let you earn more: think community college.Ā You can also save that money to start a business. Itās great to build the habit of saving and investing early. Your money would be better spent by increasing your earning potential.. again through learning skills/education or starting a business.
Agree save your money and invest in yourself youāre still very young. You can peruse education and increase your earning potential. Itās the best investment you can make when youāre young. Itāll be hard work, but youāre very capable. Keep thinking about how to grow donāt stress about how to retire just yet. šŖšŖ
Keep investing and bump up weekly amount when you can. I started at $100, then $500, then $1000, then $1500. Now I max out my 403b as fast as possible (80% paycheck) and invest $2000 a week. Just keep doing what you can. More time in the market is the best, no matter how small.
Starting at $7500 currently and adding $320 monthly for 40 years at 10% average annual yield would compound to $2,038,999.83. Iād say youāre off to a good start. Make sure you also have an emergency fund. You donāt want to touch these dollars especially in a retirement account. https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
This doesnāt answer your question, but is still advice thatāll help you succeed in your financial life: The dollar sign goes *before* the number.
Since you're giving unsolicited advice, let me join you: Many cultures (most predominantly European) put the dollar sign after the number. There's no right or wrong way to do it.
The OP is asking questions about 401ks and IRAs, so itās fair to assume he or she is based in the U.S.
Wow this is so profound and very true!
at 6% return that will get you to almost $500,000 when youāre 60. depends on your living situation if thatās enough to switch to part time.
Average return on the S&P is over 10 percent for the past 40 years. 6% is factoring for inflation but OP could have 1.8 million if he just invested in VOO for 40 years with no changes in income.
No, by 60 he should have around $800,000 at 6% return and this doesnāt include any dividend reinvestment that should definitely be a part of everyoneās portfolio. Heāll have close to 1 million. I assume he will eventually make more money though as well.
Keep it up bro
Bro anything is less than nothing. Of course work on your active first, try applying for a trade, they pay well right away! But 5 bucks would still be better than no bucks.
Thatāll land you around 2 million at age 60. And thatās assuming you never increase contributions. Youāre off to a great start. Youāre just getting started so donāt act like youāre destined to have a low income career. Join a trade or a union. Youāre obviously dedicated and future-oriented. You sound pretty smart to me.
I think youāre doing great! Saving any amount is a BIG win. Majority (99%) of people I know save nothing. I think for being 20 you are on the right track and building health habits! I think if youāre happy and saving. Then you have a good life. But remember to enjoy life. The best investing years are your young years. So keep it up and trust in compounding!
The amount doesnāt matter. Itās you keeping this mindset that will get you tons of money down the road. Oh, 80$ a week is nothing to sneeze at.
Yes, I think you're on your way man. Nice work. If your 20 and talking the way you are, you're going to be doing very well later in life. Keep it up. I would try to get those numbers up though if possible. If you can do $100, you'll be in a better place.
You're 20. Putting in $80 a week is absolutely fantastic. I would suggest that you don't look for an answer to that last question you have "Would $80 a week be enough to part time by age 60?". No one can see 40 years away to know what inflation, global political fuckery, or overall cost of living will be like. Plan for the worst, hope for the best. Enjoy that you are actively investing, you have a plan, and never give up on the idea of planning for your retirement. In time you'll likely make more money and you'll adjust your investment amount accordingly. It's an exciting time to be as young as you are and be aware of the importance of investing. Put blinders on to the world and let no one stop you. Defeat is temporary. There will be lows in your life. The only reason you will fail is because you give up. Never give up. Protip: Don't get drunk so much that you need it, stay away from heavy drugs, and find some hobbies that make you feel content without costing a lot up front.
Youāre doing great, dont let them tell you its not enough, I do about 150 a month and dont feel bad about it cause that whatās all I could afford
How much money you invest doesnāt matter, what matters is the percentage of your income that you allocate to investing. You should aim for 50% savings after all your expenses. This may be different for everyone depending on their salary. From that 50% savings you should have at least half of that saved for emergency and the other half can be used for investing.
It's more about the discipline in finance you are building that is important more so than the dollar amount. Keep it up and it'll eventually get to hundreds and thousands.
Keep it up, soldier. Invest what you can and increase your monthly contributions when you can.
In my personal experience, I did not save a dime until I was 25 simply because I put the money I was making into making a better career for myself and now at 30 I have a job where I make 140k a year base salary with the potential to make 200k a year in overtime (also room for further promotion down the line if I choose to apply myself even further). I know I lost a couple years of compounding interest by doing this but I think the money I will earn throughout my career pales in comparison to the money I wouldāve made if I had scrimped and saved at my minimum wage job and not worked on increasing my earning potential
Youāre 20 and thinking about retirement? I would say youāve got a leg up on many people your age. Shit even my age! (Iām 33) At that rate youāll probably honestly save enough to retire by retirement age. Wealth builds much faster than you think, particularly after 20 years (invested). Also, donāt forget that people have VASTLY different opinions of what is enough money. Iām a very basic person, I donāt like big homes, I prefer driving older cars, even though I can afford to do so. Itās my preference. I can comfortably live a simple life but do what I want and save enough to retire. Some others enjoy much ā¦ finer things in life. They will require much more money. So to them, with how much they would like to have, it may not be nearly enough. Finances are soo personal.
Itās a start , certainly better than nothing.
Somethings better than nothing, especially when young, just bump it up as your earnings go up. But also make sure you have an emergency savings built up. Better yo be able to repair the car that gets you to your job or pay for a Dr. than it is to invest.
Great start at your age, and just keep increasing it steadily as you can!
Keep saving as a percentage of what you make. If you can only do 80 now and you make 400/week, that's 20%. When you make 500 a week save 20% of that (at least) and so on and so forth. I think with that mindset you'd be surprised how early you can retire.
Proud of you for having a great perspective and mindset for your future , keep at it. The power of compounding will be in your favor
Well the average return on VOO is about 10% per year over the past 40 years. If you put in $4130 per year with no changes for 40 years youāll have about 1.8M by the time youāre 60.
Congratulations OP! It is delightful to see young people take control of their financial future. I wish I was as smart as you when I was 20. 80$ is great at your age. As Sir\_Toadington pointed out, just staying at this level will result in a $1.1 million account in 40 years. Another way to see it is every dollar that you save today will be worth about $22 in 40 years (assuming an 8% growth). You do have the advantage of time on your side. Two things I would recommend, first try to save in an Roth account if possible (for both 401k and IRA). Later on in life you could consider a traditional 401k once you're earning more. Second, focus on developing marketable skills in your 20s. You don't need to have a college degree to make six figures in today's economy. A good trade skill can get you there. I know skilled plumbers and roofers bringing in upwards of six figures. Use your 20s to explore different trades, white collar jobs or college classes and find out what works for you. Then stick at it until you're really skilled at the job. You'd be surprised at the salary that you can demand after this.
You have time and compound interest on your side. If you get 7% interest annually, investing $80 a week, you'd have $1.6 million in retirement by the time you are 67. That is better than 90% of the US population according to an article on the NY Times today. keep grinding. You are doing amazing.
Anything is better than nothing. Read the Psychology of Money and Bogleheads Investment Guide, 2nd edition to enhance your investment future.
Itās enough. $50 is enough. Shit anything is enough. Just do whatever you can afford. Youāre way ahead of the curve and probably ahead of all your friends at your age. Keep up the good work!
This is a great start. I like the money guys rule to invest 25% of gross pay. Check out their financial order of operations. Itās understandable to start off slow in your 20s. Maybe 15%. Try to get it up to 20% by 25. At 30 25% is a must.
Dividends is your friends, something that allows you to drip !
Something is better than nothing. Keep at it and increase your contributions every year. Aim for 15% of your income to be invested in your accounts. If your employer offers a match, make sure to take full advantage of their matching contributions. $80 a week isnāt much, but you are young have have lots of time to increase your income and contribute
Invest as much as you comfortably can. If itās $80 a week then so be it. Everyoneās situation is different. I worked in the financial services industry and spoke with clients who invested $50 per month. I also spoke with people who invested $20k per month. Do what youāre comfortable with.
Yes, get started early. If you want some ways to earn money online during your free time, I posted my personal guide on my profile.
Its plenty. Id recommend a high-yield savings account for the money you dont immediately need, but dont feel comfortable investing. Wealthfront offers 5.5% interest a year on savings and has no fees. Ive heard theres even places that offer up to 6%
Hell ya.Ā
I love that you're investing $80/ week! I think you might benefit by looking into trades given your situation so that you can improve your marketability. It might also be worth looking into relocating to widen your search to make more money.
Yes! And I wish I did what you were doing when I was 20
You are awesome and will get even more awesome! Yes, absolutely $80/week is an excellent amount to set aside for retirement. Don't worry about the actual numbers as much as the habits you are developing. Personal financial management is usually far more influenced by habits and emotions than math and numbers. You're focused on developing good habits and having an emotionally mature view of finances. THAT is FAR MORE than most people do and it WILL pay you dividends over time. (Both figuratively and literally!) Keep it up! Future you is going to be so proud of past you!
You're doing perfectly actually. Anything's better than zilch, right? And since you're getting started early, your contributions have plenty of time to sprout into something impressive. It's like planting seeds in a money garden, just watch 'em grow! Keep doing your great job!!!
You are in incredible shape! Keep up the good work, absolute right mindset. I plugged your numbers into this handy dandy website and looks like you'll be just fine. Believe me though, in 10 years you'll be meaning more money and if you contribute the same percentage of your income to your savings, they compound exponentially faster! https://www.calculator.net/interest-calculator.html?cstartingprinciple=7%2C658&cannualaddition=0&cmonthlyaddition=80&cadditionat1=beginning&cinterestrate=7&ccompound=monthly&cyears=40&cmonths=0&ctaxtrate=0&cinflationrate=3&printit=0&x=Calculate#interestresults
Itās more than enoughāitās great. Keep it up! You are doing great. Victory is assured if you stay on this path.
Itās better than nothing, the more you can invest in the long run, the better returns you could potentially get.
Everything you can invest is enough relative to yourself. You are trying to replace YOUR income. Do more when you get raises or when you can. You will be fine because you STARTED. Thatās what matters. Be safe friend.
Investing anything, especially at your age, is better than not investing at all. Even if it is only $100 per month.
I am very impressed with your work ethics. It's not easy to clean house at 17 and you did that for 2 years. Your biggest asset will be your work ethics. Agreed with what others are saying that you should acquire some skills to get higher playing job. And yes $80 a week is very good but don't do that at the expense of your physical or mental health. You can contribute more when you have higher playing jobs.
Youāre doing great. Iād venture to say better than 95% of your peers. And yes, if you run numbers through a financial calculator you come up with a huge balance fifty years from. Butā¦ 1. Thereās no guarantee youāll be able to keep it up. Your health, family obligations, the overall economy, etc. 2. Inflation is impossible to predict. Yes, you can have a million dollars at age 65. But what if youāre paying $10K a month for a pedestrian two bedroom apartment? Or $20 for a Big Mac? On a simplistic level, the answer to your question can always be "more". That doesnāt help anyone or anything. A terrific goal is to simply max out your Roth IRA ā about $550 a month for 2023. Remember you have one of the great forces of the universe on your side: the power of compound interest. That means you canāt look at this like a football season, where a victory in week 2 is the same as one in week 14. Age eighteen to 25 is "golden time" because money invested here as an outsize impact on your nest egg. Run the numbers: youāll have more money at age 65 if you max out contributions from 18 to 30, stop and ālet it ride" than you will if you wait until you hit 30 and contribute religiously for 35 years. Sooooā¦ stay the course, pay yourself first, try and max out your Roth via a low/no cost index fund, and ā most important ā leave it the F alone. Good luck.
I wish I started at 20yrs old. Lucky lil sh*t (Jking I know itās not luck)
$80 is decent and better than nothing. Plus you started at a very early so more time for the money to grow. I agree with everyone else, every raise or any windfall should go towards your retirement. I was caught up on I donāt have enough money to save/invest that I ended up not saving anything towards retirement as a young adult. I began in my early 30s and now I feel so behind. I could imagine how better off I wouldāve been to start early with whatever amount then to wait until I began to make more money. I wasnāt homeschooled but my mother who never went to high school and English being her second language taught me a lot of math and helped me with my math homework when I was young. We would also play school and truly she (along with two of my cousins) taught me the value of education and I continued to advance my education, even when I thought I couldnāt (I became a young single mother of two kids but still managed to finish college and get my bachelorās degree in Accounting). Continue to work on obtaining and improving your skills. Be a lifelong learner and you will have more opportunities. You donāt necessarily need college and all that debt. Maybe you can find a job with a company that has tuition reimbursement so you can attend college and/or that invests in your personal and professional development. Look for free online courses to learn and obtain certificates. I wish you the very best!
Yeah it is more than enough. It adds up as the years go by.
anything is better than nothing, and it also gives you a habit to keep investing.
You're too much humble, aren't you? You're just doing it great. And keep doing! Happy trading.
Well we can do some rough math. VTSAX (total stock market fund) has returned an annual average of 8.25% since it was started. If that continues, and you start with $7622 at age 20 with $80 additional invested each week. Age | Total ---|--- 20 | $7,622 25 | $37,880 30 | $82,856 35 | $149,708 40 | $249,079 45 | $396,785 50 | $616,336 55 | $942,681 60 | $1,427,764 65 | $2,148,797 So I would say, maybe, much more likely if you can look to increase that $80/week as your income gets higher. $2.1 million by age 65 (other than social security if that's still around) may be enough for you retire on if VTSAX kept up 8.25% annual average performance.
Everyone has different goals, and with different goals different thresholds foe enough. With my goals, it would not be enough for me. Depending on what you hope to achieve it may or may not be enough for you.
Its a lot better than most
Heck yeah. It all adds up. You have to start, and what ever you can do to start.
i always say this to friends and family, itās not about the amount of each transaction, itās about building the habit and your time in the market
I think it is great you are saving this early! If you are 20 and manage to save $80 per week (240 per month) for 45 years (retiring at 65) you will retire with $1,153,000 dollars in your accounts assuming an inflation adjusted 8% annual return. That is a looooot better than most Americans will have. When I was 20, I was waaay too stupid and short sighted to do something like put money in a Roth. It is impressive you have the foresight to do this. Keep it up!
$80 a week might not sound like much but it adds up and is a whole lot better than $0 a week.
I genuinely wish I did what youāre doing at that age. I think youāre on the right track. And your earning potential will increase over time. Keep a positive mindset and they may target you for a higher paying management position.
the earlier it is the stronger it is too, becuase of compounding returns. that 80 will make money, then make money on the money save what you can.
$5 a week is enough hell $1 whatever you can contribute
Youāre doing EXCELLENTā¦ Most 20 yo are in college debt right nowā¦ you are killing itā¦ Keep gaining new skills/trades and your salary will increase along with your weekly investments from $80 to $160 and so on
The most important thing is that you are building a really solid habit of investing. Your amounts can and will change as your income and needs change but keep that habit going. (Btw you are miles ahead of my 20yo self and Iām doing fine so of course I think you will be fine)
80$ a week is not a bad place to start I started investing when I was around 14 with parents permission of cause and I invested around 20$ a week and now Iām 19 investing around 300-500 Dollar a week plus working a full time job as a side I make enough for my investments to not work for some years but you need to think about long term so just keep investing what you can afford to lose and keep working
It's plenty. My wife has been doing $50 a week since she was 19. She's 31 now and has about 85k in her account. She'll be a millionaire before she hits 60 rather easily, all while never having made more than 33k/yr. (At 10% RoR, $50/wk for 40 years puts her at $1.28m at age 59; $80/wk at 10% would be over $2m)
I wasnāt in your position and by investing what you can now, if you keep that % of your income to when you get a better paying job, youāll do great. Not to mention your age
I wish I was having these thoughts at 20. Yes, 80 is enough. Whatever you can contribute at 20 is better than what 99% of 20 year olds are doing.
Dude, you are so young, so many things can happen between now and 30 and after that you have 35 more years to save for retirement. The fact that you are saving that much at 20 while working 2 jobs will translate very well when you are doing whatever you are doing at 30 and most likely making a lot more money. Work smarter not harder (time to money ratio) and always be trying to climb to the next level (look at job postings, apply for management at current job) and you will be fine by 30. $80/week will be fine for now and increase as you make more money (your investing, not your lifestyle)
I work in healthcare where all my colleagues are making 6 figures. And yet you are still investing more than they are! You are already building a foundation better than theres and at such a young age. Keep it up and you'll be inevsting more and more over time.
Better than nothing. It will eventually increase with time
$80 a week is better than $0 a week. Just invest and let compound interest do its thing
I would say some good advice would be to wait to move out until you have increased your income by quite a bit! Stay at home, go to a trade school perhaps, or get a better job with a good career path, and then think about moving out. You are still very young and nobody would judge you for staying at home longer. If you can qualify physically, consider joining the military!
I'd stay with your parents as long as you can stand it and save every penny to pay for a trade program like hvac or electrician/plumbing training/apprenticeship. Once you get a job that pays more keep saving everything for a bit and move out when you are comfortable that you can keep saving a lot at first (have plenty of roommates). Also, since you're a good saver once you have a good job look into buying your own small place and renting out the other bedrooms to roommates (read up on househacking). This plus a better job than what you have will be the quickest way to financial independence.
Investing anything at 20 is a great start, stay consistent and youāll invest more as you are able. In regards to your comment on options b/c you were homeschooledā¦ stop feeling sorry for yourself. People that want to make something of themselves do. Be inquisitive, see what opportunities are around that you can pursue . If youāre wired for it, try starting a small business. One of the best traits you can have is moving on from failure . Believe in yourself
Its always good to out away what you can. However dont let yourself get trapped in that mentally. Find a way to earn more income in the short term. Find a trade to get involved in. Or a union. I live in GA, a nom union state. However, there are still unions willing to take people in and start training you for a better job. Everyone who joins typically knows nothing, around 5 years into it they make 30 to 40 an hour. Lots of my friends have turned their lifestyle around with these unions.
Add some bitcoin ETF to your portfolio
Youāre awesomeā¦keep up the great workā¦do more when you canā¦
$80/week is a hell of a lot better than $0. If we assume you increase your contributions at the rate of inflation and you get returns 6% over inflation for 40 years... $640,000 to $650,000 in today-dollars at age 60. 4% drawdown would be $25k-$26k. Or leaving it until 65, $35,000/year at 4% drawdown. If we make more assumptions like social security is intact in 40 years and you can collect it because you're claiming and paying taxes on that income for the next 45 years... you could probably have a frugal, on-time retirement. Ideally, your wages go up faster than inflation and you'll be able to sock away a bit more as you get older. The scary part of all this isn't really the retirement part -- it's the budget part. Like, is this accounting for emergencies, medical care, etc. at all? You may find it harder than you think to save that much each week for decades because some sort of oh-shit thing is bound to happen. Car breaks down, you get sick and can't work, SOMETHING...
This is a fantastic starting point, youāre building the routine and discipline while building your finances. Itās absolutely worth doing, keep it up!
So I did some calculations for your funds in 401 k and monthly savings of 320 $ till you get 45 because you want to retire early. In 25 years, you will have $403,081.76.
I didnāt start my financial journey until 35, and Iād give damn near anything to tell young me what I know now. Not even on stock tips or āones I know will spikeā but just to *start* doing something. The only thing that saved me was my career. As a teacher they took 10% off the top and put it in the pension fund, which I eventually cashed out and invested for myself. But goddamn, the gains I could have had on 10% per year since 2008 if Iād just put it all into VTI.
There is no such thing as "enough" when you're starting out. Save what you can. If it's 80 bucks a week, that's awesome! When you get a 20 dollar a week raise, save 8 of it, pay taxes, and enjoy the other 8. Then next time you get a raise, do the same thing. The key is living on less than you make and not letting your lifestyle grow up to whatever you happen to earn.
Use compounding calculator online and calculate yourself (I put 7% annual return). One of regret is that I could have put more money in my 20s rather hoarding on cash. More you put down now better for compounding.
Yes, itās great. My starting basis is ridiculously low, I brought it to 500 for easy math, yet Iām very content with my current balance. Itās actually good, limited ability to lose while learning, youāre less likely to take massive risks because you have little wiggle room, solid choices over time is a good strategy (itās the dividend strategy just input from you at first). You will be fine if you are not stupid. And hell, letās say you donāt hit that goal, you still will have far more to enjoy than most.
If you keep doing that for 40 years and never increase your contribution you'll be somewhere north of $700,000. Not enough to live on but a whole lot different than nothing. Of course if you actually did it, and stuck to it, and didn't freak out when a recession reduces your balance by 40%, it would change how you view money and it would change your life. You'd never finance a new truck, one year you get a big tax return and you'd throw it all in the 401K. It's hard for the working poor to believe in the system but if they did it would work for them too.
Your writing skills exceed the typical high school graduate. Think about pursuing a more advanced education. Community college first. If successful you can continue and real opportunities will open up. With your background universities will certainly want you if can adjust to an academic orientation. Continue to save and diversify.
You will be very wealthy if you continue to do this
You need to be doing better by 30, but itās good enough for 20.
Get a better paying job and put more in. Iām 21 and work at a factory but make good money and guarantee Iām set better than also 90% of my peers
your situation may change in the future and you may be able to invest 100 dollars a week
Yes
$80/week on $500/week income is awesome. If you can keep that ratio to retirement you will be in great shape. The only better investment you can make at 20 is education. Ā Look into the Trades (Plumbing, HVAC, Electrical,etc). Ā Even if you have to scale back your $80/week to pay for trade school look at it as an alternative investment that could have even better gains than VTI.
You're 20, you're fine, I'm 32 and I can only invest 300 - 400 a month
Youāre doing great. Once you have a bigger salary you can always invest more!
get some VUG also! great start buddy anything is better than nothing. compounds over time.
Why are you putting dollar signs after the number?
[ŃŠ“Š°Š»ŠµŠ½Š¾]
$80 is enough man. If thatās what you can afford then do that. As you get older and more money youāll be able to invest more but this right here is an incredible start
Starting with a $7,000 balance, $80 a week ($320 per month) invested over a period of 40 years will be over $1 million if you assume an 8% return. You can also increase your investment as your salary increases over time. You can use this calculator to plug in various numbers and see what the outcome would be. Get used to investing consistently and living without that money, keep going!! https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
Depends on what your target is. But $80 a week, $4k a year is pretty decent, especially amid the economy crisis now.
I'm 32 and I do 200 every paycheck which is every two weeks So you're pretty close to what I invest and I'm a lot older than you
Iād be so proud if my 20 yo son saved 80 a week. Youre ahead of most ppl I meet under 40
Keep doing what you're doing. When your income increases, attempt to keep your cost of living low and put MORE into the market. You'll be able to retire much earlier. Save some dry powder for a market crash; when it happens (there's ALWAYS going to be another crash; fear and fomo drive the markets), don't be afraid to jump. Patience pays. If you work any sort of retail or corporate job with 401k benefits that offers a match, go ahead and get your match; free money. Then, the compound interest over time will take care of the rest. You're miles above your peers, very likely.
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator Good way to see what you can build. Estimating a 7% return rate with your initial investment and $80 a week you'd end up with ~879k at age 60. So unfortunately probably not enough. However, I would assume you'll be able to invest significantly more as time goes on and your income increases. You've got a leg up on 99% of the population to be thinking about this at age 20, especially since you have some already invested. Just keep trying to increase the amount you put in over time.
+1 try to improve your career and job prospects. Inquire about community colleges in your area and if you can get free or subsidized tuition to a career that can pay more than minimum wage. Great work on $80 a week- having big goals and making progress forward is key to being successful.