In my previous post below I briefly outlined some of the tips and knowledge I had picked up since graduating from college. It has slowly begun to dawn on me that I will be entering adulthood and moving out of my parents’ house which I have lived for the past 22 years of my life. This means that I am am currently in the process of strategically laying out my short term future and establishing my foundation as an independent human being.
Finding my own Apartment
My journey for finding a place to work has been strenuous especially since I graduated in early May. Fortunately I utilized my own personal network and I was able to land an amazing job as a financial analyst for a mid sized company in Alpharetta. Finding a suitable apartment to live in Atlanta has been interesting because I want to live a nice location but also be relatively close to work and have access to the city and Buckhead areas. Alpharetta is about 30 minutes outside of Atlanta given traffic, and I have budgeted around $1000 per month for rent and other living expenses.
Getting my own Credit Card
I have had two credit cards since my freshman year of college. These two cards are the Chase Freedom and Discover IT cards. I would definitely recommend these cards for anyone looking for their first credit cards to get since they both require no monthly fees. However, because I am moving out, I want to be fully independent from my family and thus it’s essential that I get my own credit card. Because I am moving to Atlanta and Bank of America has the largest presence in Atlanta, I will be getting the BoA Cash Rewards Card. This card offers many great perks like $200 cash back after I spend $500 within the first 3 months and 3% back on gas, 2% back on restaurants, and 1% on everything else. In addition, they offer 10% back on any cash back redeemed into a BoA checking or savings account. I would recommend limiting the number of credit cards you have to a max of 3.
Familiarizing myself with my company’s retirement packages
My company offers both 401k and Roth IRA retirement accounts. They do offer a matching up to the average 6% of my salary which is good. My eye is on the Roth 401k account which has a max of $19,000 + $5,000 catch-up annual contribution. Additionally, they have a free financial advising service which I plan to utilize asap and I would encourage you to contact your company as well!
Savings Account
I have been recently researching other possible sources of income and I realized that my savings account could be more efficient. I like Ally Bank because they currently as of June 20, 2019 2.20% interest for their savings account with 0 fees! This is amazing considering the current 10 year treasury yield is a 2.013%.
Where do I Invest?
Three words: Exchange-Traded Funds (ETF). What is an ETF you ask? An ETF is a fund or investment instrument which can be traded and holds a set of assets (typically companies). The most common type of ETF is one which tracks the S&P 500. Essentially these funds hold shares of the top 500 largest US companies by market capitalization or size. This means the fund will hold more of Apple than another smaller firm. Because the market has become so efficient recently with the readily available investment information and high speed technical and algorithmic trading, it is incredibly hard for even the best fund managers to beat the market returns over a long period of time.
This has meant that these ETFs have been the investment instrument of choice for many of the world’s wealthiest people. Someone just graduating from college, like myself, has the unique advantage of time to grow this investment. Personally, I would recommend Vanguard’s funds which offer the lowest expense ratios on the market. For example, VOO one of Vanguard’s ETF funds offers just a 0.02% management fee which means more money in my pocket. In addition to checking for the lowest management fee you can find, it’s important to look at the total managed assets which gives you an idea about the liquidity of the fund. In rare cases where you need to pull your money out, liquidity is very important. The more total assets managed, the more liquid the fund and the better your chances are for getting your money out.