{ "media_type": "text", "post_content": "Need some advice, ideally how much should I be investing per pay period in my own portfolio. Gross pay is $5500, contribute 880 to 401k and 550 to ESPP. Living in a HCOL city and was aiming for $1500, but feel like it’s slightly too much and it’s impacting my livelihood. Thanks for any advice.", "post_id": "61d483a5f8cf3b002e194e82", "reply_count": 12, "vote_count": 1, "bowl_id": "552d1d24dc1c586b09d2d051", "bowl_name": "Consulting", "feed_type": "crowd" }

Need some advice, ideally how much should I be investing per pay period in my own portfolio. Gross pay is $5500, contribute 880 to 401k and 550 to ESPP. Living in a HCOL city and was aiming for $1500, but feel like it’s slightly too much and it’s impacting my livelihood. Thanks for any advice.

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I’ve always tried to put 15% away for retirement ($825/mo at your current pay). Keep that up throughout your entire working life and if you stay in consulting you’ll be in the low-to-mid-7 figures when you retire. Try to put it in a Roth 401k if possible, but max out any matching that your employer offers first. Match beats Roth beats traditional 401k. Sounds like you might be investing too much right now. Maybe put any extra savings above the 15% into an S&P index fund to save for a house (unless you’re buying sooner than 5 years…if that’s the case out it in a high yield savings account).

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The more you save, the better you set yourself up for the future. $1,500 in savings leaves you with $2,500 per pay period - is $5,000/mo enough? Find your interests/hobbies and save the rest. The more the better, but it's not worth skipping out on the present to save for the future

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Gotcha - didn't realize those were not included. $880 + $550 + $1500 is a 67% post tax savings rate. Are you trying to retire in 10 years? If so, go for it. Otherwise taper down to 50-60% post tax savings Edit: Also, just to make sure I'm understanding your post above - you are at $2,800 / mo with $925 rent. So you have $1875/mo to spend outside of rent (phone, utilities, eating, drinking, travel). Is that right?

You’re doing great! 1000 a month is good when you are starting off, especially if you have loans and are living in NYC/SF

This is a very personal decision and should be based on what you value most. If you want to retire early then investing as much as possible is the goal which is sometimes at the expense of lifestyle. If holidays and eating out are important to you then invest less. I personally go for somewhere in the middle, I’d like to invest as much as possible for the future but don’t want this to be at the detriment of enjoying myself now (what’s the point of having a lot when you’re old if you’ve hated the past 40 years!) so I spend on what makes me happy (holidays, eating out occasionally, spending time with family) without being excessive and whilst be sensible on other purchases (I.e not buying new tech when my current stuff still works, shopping in a cheaper supermarket, inviting friends over sometimes rather than going to a bar every time)

550 to ESPP is pretty risky. Also are you hitting your max 401K contribution pretty early? Might feel better to spread that out so income isn't as lumpy. If helpful, I live in MCOL with $6400 gross and contribute $800 to 401k, $750 to market, $1,000 to savings (home) per period.

ESPP is low risk as purchases are done twice a year and we can withdraw the contributions at any time before purchase. We can then sell immediately after shares hit so there’s still gains on the 15% discount minus taxes unless the stock plummets within the day or so between when stocks are purchased and when they’re available (unlikely). If holding, then definitely don’t put all your eggs in one basket and diversify elsewhere. I was cautious when starting out and have a couple shares at $40. Now I just buy the max and hold but rebalance when it gets to be too big a part of my portfolio.

Current age, planned retirement age, marital status or plans, existing or future kids and a lot more factor into this. It cannot be boiled down to one number. Also where you invest can often be a bigger factor than how much you save. In my own opinion, your saving level is not excessive but if its bothering you and impacting current lifestyle then you should probably ease up a bit and see how it feels. You may have some wiggle room to cut costs in other areas which might seem non negotiable at first glance e.g. rent.

You can sell off some ESPP if you are crunched for cash. But overall you are on a good track.

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