[tallandblonde]

I graduated in May...starting a job in January where take home is 80k (72 base and 8 signing bonus). I'm moving to NYC for the job which starts in January.

Basically, I have a couple big decisions to make. First is what health care plan I choose. I'm leaving towards the Health Savings Account since I'm very healthy at the moment. Anyone else have an HSA for their insurance? What are the pros and cons? I've looked online and its very convoluted, but my impression is that it's the best option if you don't have many medical expenses but will still provide a safety net in the event where something catastrophic happens to me.

Next, I have the option to buy into an ESPP (employee stock purchasing plan). Up to 10% of my pay check can be used to buy the stock at 5% off market price. I'm working for a large company that doesn't have a highly volatile stock. My understanding of taxes is that you get taxed on a lower rate when you invest into a stock and don't sell for a year. Obviously, there have been times where employees have been seriously burned by ESPP's, like with the Enron scandal. Are there any pros and cons that I'm missing? Seems like a good way to invest money, and I'm working for a fortune 100 company that has been around a while.

Also, where to live in NY? I'm working in mid town. How much should I realistically expect to pay for an apartment with a few other room mates? I've looked into Queens. Looks like apartments are larger/cheaper there, but with that also comes a commute of 25-30 minutes. I'm fine with that, but anything longer might be a little too much for me. If not Queens it looks like I'll be living in Manhattan. What's the general perception of Queens? Will it be a drag trying to bring girls back there from Manhattan?

Lastly, do some of the older forum members have some general financial advice for me? Like things that you fucked up big time that I could learn from and maybe not repeat the same mistakes? I'm currently in the process of building credit as some land lords will check credit history before renting to anyone. Any other suggestions?

[jimukr104]

what field if I can ask? That is a very good starting grad salary.

[tallandblonde]

(09-20-2014 03:54 PM)jimukr104 Wrote:  

what field if I can ask? That is a very good starting grad salary.

Studied Computer Science in college, now working doing consulting...brutal major but worth it if you can get the degree.

[Merenguero]

Do you have any student loans? If so, how much? I had about $100, 000 (all from law school), which took me ten years to pay off. I paid part from a huge payday that I had a few years ago and paid the rest from the money that I made betting on the Martinez/Chavez fight. From your post, it seems like you are doing better than about 99% of other people your age, but student loans can be a pretty big factor.

[Goodtimez]

When I saw the 72k+8k I immediately thought consulting, but then you said F100 and I was confused. I'd bet Accenture, although IBM is also possible.

Regardless...
* Max out the stock plan. 5% free money.
* if there is 401k, make sure you put in enough for a match
* Build a quick and dirty retirement plan in excel. How much do you need to get out?

If you figure 4% safe withdrawal, you need 2M to retire and keep your 80k. Ignoring interest for a second...if you can save 40k per year (a lot given taxes and you live in NY) you're looking at 50 years to get $2M.

I guess what I'm getting at is you should build this model in excel so you better understand some simple principles:
* If you save a low percentage of what you make, you need long time horizons and compounding interest to get retirement
* if you save a high percentage of what you make (60%+) retirement will come sooner, but could still be a decade out. And in order to get there you need higher income
* "passive" income streams other than savings can change the picture a bunch

Once these concepts are understood the question is how do you get higher income or passive income stream. I'm not sure n Accenture partner comp (er...senior execs is what they call it?) but it would get you there. That said the lifestyle can be tough. What does this path look like? How many years? Any thoughts on passive income? Etc.

[tallandblonde]

(09-20-2014 05:08 PM)Merenguero Wrote:  

Do you have any student loans? If so, how much? I had about $100, 000 (all from law school), which took me ten years to pay off. I paid part from a huge payday that I had a few years ago and paid the rest from the money that I made betting on the Martinez/Chavez fight. From your post, it seems like you are doing better than about 99% of other people your age, but student loans can be a pretty big factor.

Fortunately, no student loans. Scholarships, state school, working, and my parents helped me with the little bit (about 5k per year) left over.

(09-20-2014 05:39 PM)Goodtimez Wrote:  

When I saw the 72k+8k I immediately thought consulting, but then you said F100 and I was confused. I'd bet Accenture, although IBM is also possible.

Regardless...
* Max out the stock plan. 5% free money.
* if there is 401k, make sure you put in enough for a match
* Build a quick and dirty retirement plan in excel. How much do you need to get out?

If you figure 4% safe withdrawal, you need 2M to retire and keep your 80k. Ignoring interest for a second...if you can save 40k per year (a lot given taxes and you live in NY) you're looking at 50 years to get $2M.

I guess what I'm getting at is you should build this model in excel so you better understand some simple principles:
* If you save a low percentage of what you make, you need long time horizons and compounding interest to get retirement
* if you save a high percentage of what you make (60%+) retirement will come sooner, but could still be a decade out. And in order to get there you need higher income
* "passive" income streams other than savings can change the picture a bunch

Once these concepts are understood the question is how do you get higher income or passive income stream. I'm not sure n Accenture partner comp (er...senior execs is what they call it?) but it would get you there. That said the lifestyle can be tough. What does this path look like? How many years? Any thoughts on passive income? Etc.

Good guess on Accenture. But anyways, this is good stuff. Thanks.

[Peregrine]

Quote:

I graduated in May...starting a job in January where take home is 80k (72 base and 8 signing bonus). I'm moving to NYC for the job which starts in January.

Nitpick: Take-home pay is defined as post-tax income. It's what you get to take home after the IRS gets their cut.

Advice: Keep living the student lifestyle for as long as you can. When you get your first few paychecks, it'll feel like an ungodly amount of money. Resist the lifestyle inflation urge. Secondly, buying is not always better than renting. #6 in http://wallstreetplayboys.com/financial-...equations/

Good luck.

[jimukr104]

(09-20-2014 06:51 PM)Peregrine Wrote:  

Quote:

I graduated in May...starting a job in January where take home is 80k (72 base and 8 signing bonus). I'm moving to NYC for the job which starts in January.

Nitpick: Take-home pay is defined as post-tax income. It's what you get to take home after the IRS gets their cut.

Advice: Keep living the student lifestyle for as long as you can. When you get your first few paychecks, it'll feel like an ungodly amount of money. Resist the lifestyle inflation urge. Secondly, buying is not always better than renting. #6 in http://wallstreetplayboys.com/financial-...equations/

Good luck.

+1..NYC is a city where renting is cheaper.

Also some tidbits to consider.

If bonus is for signing on than your anual income will be 72k (until a raise). After taxes and Fica and other deductions(health?) you will end up with about 4k a month. This isn't including retirement or other savings..which at most should leave you with 3500 a month.
4K is decent but not a 'go run out and buy everything salary' in NYC.

If your working mid town the PATH train works. It might be cheaper for you to move to one of the New Jersey commute cities serviced by PATH. I believe you then get out of NYC taxes. PATH commutes can actually be less time consuming than traveling from the Boroughs and they run 24/7 just like subways. The fare is the same.

You then get the bonus of being able to shop at REAL supermarkets NOT the overpriced Manhattan ones that charge convenience grocery store prices( unless you find a Keyfood which a few exist)