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newlywed

How Much To Invest?

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I'm in my early 30's, a newlywed, and finally decided on a career in the medical field that I've been doing now for only two years. Up until now I've been living paycheck to paycheck, but am now able to invest. My question is...how much of my monthly salary should I invest to make it worthwhile? Thanks for any suggestions.

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The short answer is, "As much as possible without causing any undue stress to your present-day finances." It's tough to give the long answer without knowing more information, though. If you can do elective deferrals up to the legal limit of the law (that's $4,000 for an IRA, I think, and $14,000 for a 403(b) account), then you'd be setting yourself up for a great retirement, I would think.

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Ah to be 30 again. My wife and I will retire in 2006 and share these thoughts with you:

 

be honest with each other

 

develop a family budget

 

pay yourselves FIRST.

 

Learn to live on 85% or 90% of your take home pay and save/invest the rest.

 

Develop a cash reserve before you start investing. Unexpected expenses will arise (guaranteed), the cash reserve will help you weather the storms without cheating on your budget.

 

Determine risk tolerence for both of you. Remember that inflation is also a risk.

 

Vow not to pay outlandish expense ratios for the investment vehicles you purchase.

 

Best Wishes, may God Bless!

 

 

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In my late twenties when I started to get a tax refund (because I had only "1" exemption) which I split between long-term savings and vacation money. In a few years I had more to save. Being spiritually bankrupt at that time I decided to "tithe" to myself, put 10% into retirement savings of one kind or another. My first choices were bad: annuities, chasing current mutual fund "leaders", paying too much, etc. But the good news and the other good news is that (a) I got smarter in investing and kept it up even after (b) I got spiritually grounded. Of course the key for me was to find a God who was self-reliant and wouldn't need me to fund him too. Get started! Maybe try an 8% long term/4% vacation fun savings plan. And last, no high interest debt, pay off the cards...Have fun!! Dan

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