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Just something to think about. I typed that while I was waiting in line at Chick-fil-a.
New grads too often graduate and saddle themselves with new car payments and all the cool shit you couldn't do when you were in school.
Before you do that, make sure you are paying yourself first. Compounding interest is awesome when it works for you. Every dollar you get into debt, compounding interest works just as hard against you.
You need a reliable car. A 26k Camry Sport is good enough, if it allows you to capture your employers entire match and you can max out your Roth IRA $7,000 at age 22-23.
Just some quick numbers. You graduate. 50k salary. Your employer matches 5% in your 401k. So they will give you $2,500 free dollars if you put in $2,500 dollars into your 401k. That doesn't include any profit sharing they put in for you either. So that is Roth 401k at $2500 and traditional match at $2500. Then if you put in $7k to your Roth IRA account, that means you put in $10,500 total in Roth. Do that for the first 5 years out of school. That would be $52,500. When you retire, even if you didn't put a single dime more into any of those accounts, it would be worth $2,300,000.
If you wait 10 years to start age 32, that same $52,500 would only be worth $1,150,000.
Make a small sacrifice now, for huge compounding interest gains later. Build an Army of Dollar bills to fight for you. And they will.
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