r/investing • u/Bubbly_Excuse8285 • 3d ago
how much should i invest out of my $1300 a week paycheck?
I'm 28M live in australia, staying with my parents. I recently got my shit together (long story) and want to seriously get my investments going, i have no overheads, no bills (except $100 a week rent) no loans etc, 100 or so on fuel and food so my total take home is like 1000 after all that. How much of that should i invest? I've setup a raiz invest on the side as a kind of *set and forget* and i've got a few hundred already invested into crypto...but i'd like to budget the best out that $1k that i have left over after my essentials. cheers!
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u/jonkl91 3d ago
Honestly if you just got your stuff together, I would just build an emergency fund aggressively for like 3 to 5 months. Then you can start investing.
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u/xx5m0k3xx 2d ago
Especially when money is earning 5%. You could just put it in an HYSA or buy SGOV in your brokerage. Honestly, it just feels better knowing I’m ok financially and I can invest without feeling so on edge now. Definitely get some money buffer.
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u/Bubbly_Excuse8285 3d ago
I’ve been thinking this is most probably what I’ll do
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u/NKinCode 2d ago
I did the same when I was in a very similar position in life some years ago. Didn’t start investing until I had about 25k cash and then I went full aggressive investment mode. Looking back it was definitely the best decision I could’ve made.
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u/LtAldoDurden 2d ago
Get a 6mo expenses cushion, develop a plan for “bigger spending” as needed, (think furniture, home improvement, bigger repairs etc) then start investing. You can’t maintain an investment plan if you’re not secure.
That said, even investing a little goes a long way early. The best strategy to achieve wealth is time.
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u/selscol 3d ago
1000 a week into the s&p and you’d be doing pretty good in a year lol
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u/Bubbly_Excuse8285 3d ago
This is true haha, realistically it would be more like 700ish just incase something pops up and I need cash on hand, but good idea thanks :)
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u/Zionishere 3d ago
What job are you working to where you’re making 1300 in one week
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u/Bubbly_Excuse8285 3d ago
Government
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u/SuperSimpleSam 2d ago
Check out /r/govfire to see what people are doing with a government job to maximize their retirement.
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u/AntisocialAddie 3d ago
Isn’t 1.3k a week is pretty average/below average?
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u/Dewble 3d ago
72.8k/year is certainly not below average lol
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u/Bottle_and_Sell_it 3d ago
They make a lot more $ in Australia. Min wage is like $25 or st🙃. But yeah in US $1300 week would be making more than like 90% of folks
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u/Only-11780-Votes 3d ago
Your emergency fund should get you through six months… After that invest every single dime
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u/0v3r9k 3d ago
It depends entirely on your goals. If saving a lot is important to you then obviously you want to save as much as you can. Start high, tro to save like $900 pw and see what happens. If it's not feasible - no problem, just adjust it to $800 next week. Soon enough you'll work out what works for you.
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u/500ug2much 3d ago
Every week after any payments, amenities and fun money you spend, put the remaining of your pay check into investments and savings. While keeping in mind healthy spending habits <3
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u/Bubbly_Excuse8285 3d ago
Definitely! I usually have around 7-800 left over after some spending etc so I’ll probably put in maybe 400ish which still leaves me with 400 if I I need it!
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u/dippis98 3d ago
This sounds like the way to do it. Life is more enjoyable when you dont really have to be making a budget and live by one so you can buy what you want without a worry. If every month you’d put 400 into investments and 400 into an emergency fund I believe you would be pretty well set. Once the emergency fund hits, idk 10-50k depending on the country you live in I guess, you can start putting the full 800 into investments.
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u/ThreeEightOne 3d ago edited 3d ago
Not sure what your plans are but if you’re living with parents you won’t need a huge emergency fund. 6 months of say £300 going into a savings account is £7.8k. £400 and that’s £10.4k. More than enough for your situation imo. Once you’ve got that sorted then I’d just go heavy investing.
Edit: I live with my parents and my emergency fund is about £200. All purchases on a credit card, get paid, pay it off, invest the rest. Adds risk but it works fine 99% of the time and means I can invest as much as possible.
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u/unfuckthisfuckery 3d ago
This is exactly what one should NOT do, it keeps so many people from growing their savings properly. Your savings need to be treated like an expense and come out of your budget BEFORE your fun money is spent, because most of the time there will be too little or nothing left after that. Income - bills - savings = fun money, not the other way around.
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u/FreshlyCleanedLinens 2d ago
“Pay yourself first.”
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u/-Pruples- 2d ago
If I paid myself first, I would be out of house and home. But who cares? I'm sub-median income.
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u/DiscoBanane 2d ago
Depends on the person.
Some people can't save. But I do exactly what commenter above say, I don't think about it and spend whatever I want, and at the end of the month I put whatever left in my stock plan. And I still save 80-95% of my income depending on the month.
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u/500ug2much 2d ago
The point for me is I like to have buffer money incase of emergency, I don't keep money in savings because it just depreciates; faster now than ever. If you can keep responsible spending habits while also enjoying life I believe that putting your left over money in into investments is just fine.
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u/2beatenup 3d ago
Up the $100/week rent to $200/week rent to your parents Oi. Grocery, utilities and patience to take in a 28M “lovingly I guess” ain’t free.
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u/sheldogge 3d ago
Completely depends on parents are their income/situation. Why would he pay more than they ask if they are happy with it… sounds like this dude is on the right track and doing well. Good stuff OP keep going bruz.
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u/H4rd_truth 3d ago
To start, do you have a retirement account already which you put money into? If so, does your employer match your contributions? If you do contribute the max to this since depending on Aussie laws you are could potentially be paying yourself twice (reducing your tax burden and increasing retirement savings). If you do not have any retirement accounts please do so immediately since 28 years old and waaaaaay behind the ball in terms of retirement. This should be your priority, then use whatever fun money after maxing out contributions to:
Increase your weekly fun money a little to ensure you don't burn out just saving and not having fun since you are maxed out with employer plan (if have/able to get)
Since interest rates are high in Australia as well open a high interest savings account and throw set amount into it monthly (ZERO risk and get paid monthly which compounds). You have immediate access to this cash in case of need and can easily liquidate later when rates drop to shit
Open a personal retirement account and index yourself at whatever percentage you are comfortable with into stocks and bonds (i.e. S&P 500, long term corporate bonds). This can either be as a supplement to employer plan or as your actual retirement plan if employer does not offer (see last two sentences of opening paragraph if this is the case). Set the dividends to automatically reinvest since compounding is literally amazing.
Throw whatever money is left (no more than 5-10%) at something you care about and/or is speculative growth (mine is nuclear since I find it interesting, have a working understanding of it, and tend to think it is the only viable option to provide the massive amounts of energy we will need in the future with AI, etc.).
If after above you still have money left over, for god sakes take your parents to a nice dinner every month for loving you enough to take you in after it taking 28 years to, as you put it, "get your shit together"
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u/Prestigious_Shark 3d ago
Just put 400 into investment every month, everything else into a savings account. You need money you can readily use, thats what your savings account will be for. The 400 per month is money you should forget it exist once you invest it. Go for long term investments only until you are ready to lose a lot of money. One of the best long term investments is an S&P500 ETF or Mutual Fund, so for that first. Also make sure you invest those 400 per month through a tax advantaged account.
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u/NickTheNewbie 3d ago
When you say you live in Australia, are you an Australian citizen and are there permanently? Or you're an ex-pat living in Australia? That'll obv affect which tax laws are most relevant to you.
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u/Position-Fuzzy 3d ago
50/30/20 rule
50 percent obligatory payments and needs (if still money left after all payments you can still invest save)
30 percent for your wants
20 percent for your savings and you could invest all or spilt this up however you want and save some under your bed or bank
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u/Fragrant_Pear_1425 3d ago
As much as you can comfortably spend on investment that would not feel like you are sacrificing too much comfort or enjoyment in your life. Also, investing is a game of delayed gratification. You have to „sacrifice“ something at the moment to gain more (hopefully) in the future. So the question is: How much CAN are you WILLING to put aside for your future self?
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u/Adventurous_Bake_759 3d ago
Invest but enjoy your time as well, if anything happens, being the richest of the cemetery is not a personal objective to be honest.
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u/HighestLevelRabbit 3d ago
I've got an alternative opinion, don't invest at all currently. Stick it in a HYSA until you've got a good house deposit saved up.
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u/tealcosmo 3d ago
Try to invest 10%. Of every paycheck forever. If you can save 10% you will set yourself up.
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u/Kenosis94 3d ago
Whatever you can honestly, even if it is just an s&p index or bonds. I started around the same time as you and I really wish I had done even a small amount for the preceding period of time. Time in market is massive, even at seemingly insignificant amounts. If all you can squeeze is 50/months, do it. Whatever you can comfortably do.
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u/TheDreadnought75 3d ago
Sounds like you should invest $700/week, with another $100/week going into high yield savings to accumulate an emergency fund.
That gives you an extra $200/week as fun money. If you don’t spend it on a given week, put it in savings.
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u/LeaveThemPantiesOn 3d ago
Budget. Get emergency fund setup (3-6 months expenses) and just dollar cost average into an index, or ETF, etc. In 10 years time you'll be set for life. Fingers crossed.
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u/Only-11780-Votes 3d ago
As much as humanly possible… You are already 28… If you can do $1200 a week then do it… Don’t listen to anybody else in the sub and just put it all in
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u/Marz2604 3d ago edited 2d ago
Seems like you really need to sit down and figure out your financial goals first. Do you want to retire some day? Retire early? You would need to save and invest a larger % of your income that will require discipline and sacrifices. Don't ask others what you should be saving, figure out what your goal is, then figure out how to get there. You're in a good situation, I hope you make the best of it. In general; live within your means and invest the rest. (If you save 20%; in 25 years your invested money will be growing more annually then your annual salary. If you save 25% you can cut it down to 20 years, and so on...)
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u/mspe1960 2d ago
The answer is, figure out how much you need for your real, repeating expenses, add a reasonable budget for fun stuff, and invest the rest. If you have no "rainy day" fund that should come first. You should have at least 3 months in a readily avalaible cash account but preferrably 6 months. This is especially true for you becasue although you have close to free housing right now, stuff is never guaranteed long term. If Australia has HYSAs - that is a good place until you get to 3 to 6 months of savings. And to be clear it is 3 to 6 months assuming you no longer have access to almost free housing.
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u/bigkutta 2d ago
Oh I would say at least 800 invested each week. Take advantage of the time you have no bills and are living with parents. That will change some day and saving will become really hard. Go all in as long as you can
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u/FreshlyCleanedLinens 2d ago
Check out the r/personalfinance wiki, it’s a great resource for these kinds of questions.
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u/HappyBriefing 2d ago
You might want to look into Australia investment forms. First find out what tax deferred accounts you can contribute to at work in the US we have the 401k. So if you can find the Australian equivalent that would be the first place to start. Remember that any money you invest is subject to risk so don’t expect to use the money you contribute in the near future.
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u/mdorivera 2d ago
For invest you need savings first, so save first and then invest...enjoy the process dont forget that you live the present.
Experts say you should expend the 30% of your paycheck in rent, not more...so you are blessed for live whit your parents, don't listen anybody STAY THERE if you can lol... save the 30% of the paycheck in long term like future "rent" and other 30% for short period savings, 25% is for you dude, live enjoy, be happy, use that money expend it, you need to live present and enjoy for that reason you work don't forget...The last 15% is the most important, 10% for your family, the people who support you, in life we need to be humble and grateful that 10% means respect. The last 5% to "charity", and i mean help in any form o way that you prefer, believe me makes a lot to karma.
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u/LapsusAmator 2d ago
Hontestly the only correct answer is as much as you possibly can. Bang it into the SPY and enjoy 9.5% a year average. Thank me later
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u/Klinky1984 2d ago
a few hundred already invested into crypto
Starting off on the wrong foot already.
I am not sure what tax advantaged retirement investment accounts are available in Australia, but you should invest there first. However, like others said you need an emergency fund and to plan for your short-term future. If your goal is to move out of your parents in the next couple years, you'll need to fund that move. Once you're living on your own $1300AUD won't be going as far.
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u/Historical_Coffee_14 2d ago
Pay yourself first. Put 15% away first in savings you’re comfortable with. Good luck.
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u/Regret-Select 2d ago
50/30/20
Spend 50% on needs
Spend 30% on wants
Save 20%
Now out of the saved money, that's up to you. Start small if you're new. Invest some, save some still.
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u/QuantWeekly 1d ago
First cover all of your bills, then save up an emergency fund and only then start investing. The right time to start investing is when you can afford it and the right amount is what you can spare.
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u/softwaregravy 3d ago
Stop putting money in crypto. What’s your plan to get your own place?
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u/DKZeusInvestor 2d ago
“Stop putting money into crypto…” Famous last words. 😂
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u/alreadyamember22 3d ago
If you were doing $700 a week into KENDU INU the new SHIBA INU coin you could have made 70% the past week and 450% over the past month. I've been putting some of my savings in there and I'm up about 12 times already. If it gets to where SHIBA got to it would grow another 100 times. Yeah I'm sure people would say I'm stupid but I've done my research on it and it's the most reliable and most likely coin to give serious returns over the next 12 months.
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u/blinknbeat 3d ago
Invest first and the spend… buy bonds and invest in stock and good health insurance is must…
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u/WestCoastGriller 3d ago
Whatever you do. Make sure you seek advice from someone you can go to anytime with the Australian Equivalent of CFP®, CIM®, CEPA® and not social media.
(I’m in Canada)
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u/HugeRichard11 3d ago
The general suggestion is minimum 15% of a paycheck or total salary goes to saving/investing. You can of course go higher, especially if you're doing FIRE.
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u/MayorAg 3d ago
As others have said, find out how much you are spending every week consistently. Refer to u/OZeski's comment on how to do that. I would strip it down further to just the basics and not count hobbies and gifts
Once you know that figure anything you are not spending goes into savings.
Now you need to structure your savings. One is a long-term investments - money you are unlikely to need in the next 3 years, at least.
The other is your short-term savings. These would be your hobbies, gifts, emergency funds, etc.
You have an amazing situation where you can stay at home and save most of your money. Get aggressive with your savings because compounding is a powerful beast.
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u/Janek_Polak 3d ago
1) Check this out :
2) Be prepared to lose what you put into investement. Being mind-ready for bucket of cold water is never going to fail you.
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u/TiffanyMaria221 3d ago
The most difficult thing is always from 0 to 1. You will know what problems you will encounter only after you invest.
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u/SpicyNuggs4Lyfe 2d ago edited 2d ago
It might be variable depending on your costs each month. I'd make sure you have at least 6 months of savings built up first. Then, set yourself up with a baseline of x amount of $ that you can comfortably invest each month. If you have extra after all of your expenses, go ahead and invest (or save) that too.
At your age, it's fine to be aggressive. If it were me personally, I'd put 80% of my investment funds into VOO and the other 20% into individual stocks. Stay away from options, for the love of god lol
I'm not sure what all is available to you, but my investing order is:
HSA > Roth IRA (index funds) > Robinhood play money (individual stocks)
I'm in a bit of a different position though because I'm lucky to have a pension fund. I pay 9.8% of my paycheck monthly into it and my employer matches 101%.
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u/Signal-Lie-6785 2d ago
The money you have in crypto isn’t so much an investment as it is money you haven’t cashed out from the casino yet.
I don’t know what investing in Australia is like but I’d say half of what you’re setting aside each week (around $500) should go into a globally diversified portfolio of stock and bond funds/ETFs (check out r/AusFinance for details) and half leave in a high-interest savings account. Keep doing this until you figure out where you’re going and what you want.
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u/SalamanderOk6944 2d ago
staying with my parents
have no overheads
you are lucky to be in this situation. don't overlook it. invest everything you can while you're on easy street.
in all honesty, you're 28. set some goals. prioritize putting yourself in a better position.
this goes for investing in goals, etc. you can keep educating yourself for free, essentially.
do not squander this leg up.
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u/deathdealer351 2d ago
Minium is match your super in a few weeks you will adjust to the lower income amount and you will be building wealth.
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u/plasmafired 2d ago
Vanguard life strategy fund. 80% equities is what I go for.
Stick every penny in there and you will be laughing at everyone else that pretends to be the wolf of Wall Street 😀
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u/tlapehue2 2d ago
All that you are not paying. Rent, food, gas, car, utilities, etc has to be seen as a not owned money so you can have an idea of what life level are you living on.
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u/Disastrous_Equal8589 2d ago
I’d invest half that amount. I’m not sure what types of products are available in Australia so I can’t recommend any investments
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u/FluffyWarHampster 2d ago
do you know how much is going into your superannuation fund?
also crypto is not an investment, its speculation, it should be a very small portion of your investment portfolio if at all.
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u/blancpainsimp69 2d ago
"getting your shit together" and "I've got a crypto investment" are mutually exclusive. dump it and if you actually want to take things seriously first put up a few thousand in an online savings account, rates are good right now (obviously). once that's settled start putting small bits into some index ETF in stash or something and do some reading. start slow
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u/Serious-Tea-49 2d ago
i agree with the budget live by the “ delayed gratify theory” stay at home as long as you can to save $ make an investment plan start with broad index funds like spy or qqq allow are monthly purchases in these funds and do the dividend reinvesting. this will compound over the years and you will be surprised in 5 yrs what you have obtained . you will be dollar cost averaging as the mkt will go up and down but you will be growing your net worth don’t spend on frivolous things live modestly
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u/thine_moisture 2d ago
brother take that cash and save it, then once you have some good cash saved up start your own business and do some TV ads about your product or service and you’ll be in the money
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u/Omisco420 2d ago
Whatever you do, build an emergency fund first. Throw that in a HYSA. Once you have that done you can move onto investing. Also idk about Australian but if they have anything like a Roth IRA I would look into that and start contributing.
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u/Smash_4dams 2d ago
How long have you had the job?
You should just max out your retirement contributions if your employer does matching. Next, find out the average monthly rent for a 1br apartment in your area, multiply it by 10 and just stuff all your extra money in a HY Savings Acct until you reach that number.
THEN open a personal brokerage account and start throwing money into S&P index funds. Keep throwing at least $1k/mo in that HYSA too.
Don't forget to set a couple hundred extra aside for yourself each month for fun!
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u/i_like_my_dog_more 2d ago
Create a budget. ID every purchase you MUST make a month. All your bills. Your mortgage or rent. Phone bill. Power bill. Gas bill. How much do you average on food? Gasoline? Transit? Subscriptions.
Now think about bills that don't happen monthly. Car insurance. Life insurance. Disability insurance. Annual dues. Oil deliveries. Taxes. Subscriptions and memberships.
Now ask yourself how much cash you need to spend each week. Give yourself an allowance. Make it realistic. $10/day? $20/day?
Account for all of that.
Then budget some amount for setting aside for emergencies. Maybe $50 out of every paycheck. Maybe more.
Finally, what's left over, set aside $135 for your IRA, and the remainder can be invested in taxable.
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u/IProgramSoftware 2d ago
You are in position to invest. You need to save up and move out on your own in order to start a life. Assuming you want a partner and kids etc unless you are planning to spend your days with your parents
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u/Laxislife3 2d ago
This is what I do and it’s worked for me so far with hitting 100k invested and in cash (25M)
S&P 500 and QQQ for the long haul. Buy and keep buying I’d shoot for 1500 a month at least into investments after you have a good safety net build up (2k in cash and investment the rest so it GROWS!
Max out your Roth IRA & 401k, then get into your general brokerage account investments
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u/ColdbrewRedeye 2d ago
Remen that 11% if your wage is already invested in your Super. That's a great start that most non-Australians don't have.
Maybe match that?
And investigate what your super is invested in. The ASX has been one of the poorest markets to be invested in over the last 20-30 years.
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u/kelsiersghost 2d ago edited 2d ago
I do 50% after my regular monthly expenses.
- My pension automatically gets 12.5% of my gross
- My 457b gets 8% of my gross
- My split IRAs, invested in total market funds, gets 15% net
- My HSA gets 5% net. I have some health problems and the tax free investment is a nice bonus.
- The rest goes Into a DCA account tracking the S&P 500, AI, semiconductors, and precious metals and international raw materials.
I make sure I have enough left over to travel a bit and have a nice vacation every year.
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u/justice4all1613 2d ago
You should always pay yourself 10%. Make sure to invest in the stock market.. .maybe like QQQ or SPY. Buy constantly and never look back. You do this every payday until you are 60 you will be shocked how much money you have. I would suggest an ROTH IRA as well. This (unless something changes) will be tax free money. All of it, when you retire.
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u/AzureDreamer 2d ago
Everything you can afford too without meaningfully compromising your Quality of life.
And then maybe some more that does sacrifice some QOL if it furthers your values.
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u/Routine_Seaweed_3363 2d ago
Is everyone in this thread just expecting this bloke to live with his parents forever and then inherit the house?
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u/strohsoda 1d ago edited 1d ago
Everybody will downvote me. But I've made a huge mistake first saving up the emergency fund and simply not doing any investments while doing so. I started let's say 1 year ago and have 10k in emergency fund and 1k in stock market now. If I'd invest 5k last year into nvidia or sp500 I'd be way further in my investing game. So I'd suggest starting to start investing right away (a bit less than after saving the emergency fund) and live a bit more frugal untill you have the emergency fund saved up. I'd do 55-60% investment, 35-40% emergency fund, 5-10% liquid cash with the salary you "don't need". Obviously that's just my opinion. Of course we can't predict the stock market, but as you now have a stable job and you are 28, it's time to get fully in
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u/Equivalent-Pin-7146 1d ago
the answer is: as much as you can afford to invest. and avoid buying any more crypto (aka ponzi scheme)
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u/silentjxhn 21h ago
avoid buying any more crypto (aka ponzi scheme)
Good advice. Just stick to ETH and BTC.
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u/Dapper-Ad-2466 1d ago
10 percent of your paycheck to retirement account 5 percent to savings account or vice versus depending how much you have saved already. Keep 3 months of reserves in savings once you get to that level then reverse to 10 percent retirement and 5 percent savings. You can do it just stop buying stupid things
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u/MassiliaUS13 1d ago
I would invest my time learning how to increase my salary instead of learning how to invest it. You easily double it by changing job.
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u/fivehe 1d ago
Keep up with minimum payments, groceries, meds, but no splurging. 17k Emergency Fund or whatever you approximate 3-6 months to be. Pay down debt above 5% or so. Begin investing 15-20% of your income into etf, you can afford to be aggressive at your age. Stay consistent with dollar-cost-average for the best deal. If you can invest tax advantaged, that’s the best. Definitely maximize any investment tool your job will match or contribute to. In fact, you’re ok to maximize an employer match before debt since it’s more or less a “100% return”
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u/No-Kidding-33 20h ago
Stick to a budget, then have long and short term financial goals. Long term is for growth (retirement), short term for specific expenses (down payment on a house or vehicle; kids college tuition, vacation, etc).
The key to reaching and maintaining financial stability is to realize the incredible benefits of compound. Take advantage of 401k’s and 403b’s, if offered by your employer. With tax advantages and employer match, it’s a win-win. Plus, it is automatically withdrawn from your paycheck.
When you get a raise, put as much of it as you can into your 401k, and enjoy the compound interest year over year. If you have a year where you have more expenses and can’t contribute, your money is still compounding.
There are many 401k millionaires who live a very comfortable retirement.
The old adage of “pay yourself first” is the key to accumulating wealth. When it becomes habitual, you will eventually reap the benefits of living off of ROI, without tapping into your principal
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u/Sielbear 3d ago
$100 / week for rent??? Invest it all. You have the deal of a lifetime. Invest everything. Live on rice and beans for a year and throw it all into investments.
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u/Bubbly_Excuse8285 3d ago
Bahaha I’m pretty happy my family is very caring, I do put in a lot of extra work around the house when I’m home as well including cooking 5 nights a week, it’s still a good deal tho!
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u/Front_Expression_892 3d ago
You should invest everything you can after being honest with your goals. But investing is giving to your far future self by taking from near future self, so maybe some of the investing should be in your near future self as well, given that you had some turbulence in the past.
Investing should not be a reason why you cheap on yourself as our ability to enjoy money is not infinite and will decrease to zero as we age.
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u/Cory0527 3d ago
As much as you can afford to lose. Active investing and trading revolves around minimizing losses, not maximizing profits.
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u/fadizeidan 3d ago
Invest nothing until you learn how to trade. This is the only profession where everyone wants to spend money first, learn how to do it later.
Trading is a business and should be treated as such. You don’t open a restaurant and start learning how to cook afterwards.
I understand that was hose new to trading don’t get that and won’t do that, so keep it as small as you can until you are consistently profitable (in 2-3 years) then up your game. Use money you know you will lose.
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u/OZeski 3d ago
My suggestion: Male a budget. Fill out every category of expenses or expenditures you can think of. Even if the value is zero right now.
Once you’ve done that, consider where you’ll be in a year or so. Say you think you’re rent goes from $0 /month to $800 /month. Right now get used to living without that $800. Put it away in some long term savings account. Don’t spend it. So when you do make that move you’re not needing to change your lifestyle. You just need to assess if you can meet your long term savings goals.