Invest what you can. Once you're in a world where you've got a 401K, max up to the company match to take all.the free money at a minimum and you can always reduce your contribution for a few months if necessary when you have a surprise expense like new car tires.

That may require a budget. Cut costs so you can put more in your 401K

AggieT said:

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Roth IRA. VOO.

Or bitcoin.

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Seconded

I strongly applaud your work ethic and frugality and desire to be saving AND investing for the future.

But…dude, you're 21. $1K + $100 a month isn't going to move the needle in the long term. Based on the attributes I listed previously, you'll be just fine in life.

Take that cash right now and go on a trip someplace. Go blow it on some life experience of some kind. Go to a casino and put it on red. Or…can't believe I'm saying THIS…buy Bitcoin!

Once you get a real job you'll have plenty of chances to open an account at Fidelity and invest in a mix of low cost index funds! If you choose to ignore what I've said, at least invest it in some "high risk" technology mutual fund., leave the boring and "sensible" investments to us old farts.

chris1515 said:

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I strongly applaud your work ethic and frugality and desire to be saving AND investing for the future.

But…dude, you're 21. $1K + $100 a month isn't going to move the needle in the long term. Based on the attributes I listed previously, you'll be just fine in life.

Take that cash right now and go on a trip someplace. Go blow it on some life experience of some kind. Go to a casino and put it on red. Or…can't believe I'm saying THIS…buy Bitcoin!

Once you get a real job you'll have plenty of chances to open an account at Fidelity and invest in a mix of low cost index funds! If you choose to ignore what I've said, at least invest it in some "high risk" technology mutual fund., leave the boring and "sensible" investments to us old farts.

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pretty much was going to be my advice. Don't. Save it. And when buddies want to take a trip somewhere, go. Invest when you are in the real workforce.

put all you can in a Roth while you can. At some point you are going to reach an earned income where you won't be able to directly contribute to one; plus it gets the 5 year clock on your Roth started.

Roth income limits for 2025 $150k filing single and $236k married filing joint

Even if you decide to not go the Roth route, please open one and put $100 in it to start the 5 year clock.

Roth IRA, low cost index funds.

401k once you go full time and have access to it. HSA/taxable beyond this. Look up the Money Guys' financial order of operations.

Listen to Bigger Pockets Money podcast. Your salary will likely increase quite a bit over the next few years. Feel free to increase your quality of life a little bit, but also increase your investments. It's a lot easier to not allow lifestyle creep now than it is to dial it back once it's taken place.

That said, you're 21. Don't feel bad about spending money on life experiences if you're meeting your investment goals.

I second this recommendation. Low cost index funds or ETF's that cover a broad base of the market, mostly US based but maybe some exposure to international markets as well. Dollar cost average in over time. Live below your means but enjoy yourself too. By the time you get into your mid -30's you will likely begin to see the simple wisdom of this approach.

100% VOO

I have both of my kids do the same thing, but at 15% of their salary.

If you start in your early 20s, you never have to worry about it. You are getting a head start on the rest of the field.

@coopercuffe said:

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I'm 21 years old and making enough money from my internship this summer to start investing. I'm planning on putting $1000 in and then doing $100 every month from here on out. If you were in my shoes how would you invest it?

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My son will be 21 next month, so you are young. He is also doing internships. He isn't interested in investing yet, so I do it for him.

My advice is to throw as much as you can into a 401k. He is doing 2 internships at the same time and for one of those, I deferred 100%. So he gets no salary in hand. That 401k money I moved to an IRA in his name and invested it in an index fund.

Do that if you don't have expenses that need immediate payment like rent, food etc.

fauxstradamus said:

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At 21 I would personally pile into bitcoin and just don't sell it

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I like this idea. I will think about it for my son.

Is it possible to buy a fraction of a Bitcoin? He does not have 100k or whatever it costs now.

infinity ag said:

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fauxstradamus said:

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At 21 I would personally pile into bitcoin and just don't sell it

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I like this idea. I will think about it for my son.

Is it possible to buy a fraction of a Bitcoin? He does not have 100k or whatever it costs now.

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yes, you can buy partial coins.

or bitcoin etfs

What do you want out of the money? That should drive what to invest in. People are right $100 a month does not move the needle for them, but a $100 at age 21 monthly will grow over time. With $100 you can buy 2 shares of Toast a month, 5 shares of ARCC which provides a dividend, or whatever stock you think will grow.

I started with $100 and free trades and eventually it turned into a real account. We all have ideas on what others should do with their money, but what do you want and once you figure it out make a plan. Sticking to the plan will really be the impressive part.

Tex117 said:

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chris1515 said:

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I strongly applaud your work ethic and frugality and desire to be saving AND investing for the future.

But…dude, you're 21. $1K + $100 a month isn't going to move the needle in the long term. Based on the attributes I listed previously, you'll be just fine in life.

Take that cash right now and go on a trip someplace. Go blow it on some life experience of some kind. Go to a casino and put it on red. Or…can't believe I'm saying THIS…buy Bitcoin!

Once you get a real job you'll have plenty of chances to open an account at Fidelity and invest in a mix of low cost index funds! If you choose to ignore what I've said, at least invest it in some "high risk" technology mutual fund., leave the boring and "sensible" investments to us old farts.

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Is this a joke?

Invest the money (but don't invest so much you miss out on a very specific time of your life that you will never be able to recreate. IE 21-25). Find the right balance.

You have the right mindset.

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This is the correct answer. Missing out on trips or good times with friends from age 21-25 is not worth having an extra 10-50k in a retirement account when you are 40. Those trips and good times are priceless.

Plus, it's not like the options are starting saving now, or start 10 years from now. If he's already thinking about saving at 21, he will certainly start saving when he starts working full time. So the difference between what he's proposing and not starting until he's 22 or 23 (or just investing a smaller amount) is very minimal in the grand scheme of things.

Maybe he's making enough from the internship to invest what he's proposing and also take trips, etc. If that's the case, then go for it. But I would likely just put it in a taxable account so that it can be accessed if an amazing trip or opportunity comes up where that money is needed.

El Chupacabra said:

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infinity ag said:

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fauxstradamus said:

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At 21 I would personally pile into bitcoin and just don't sell it

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I like this idea. I will think about it for my son.

Is it possible to buy a fraction of a Bitcoin? He does not have 100k or whatever it costs now.

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yes, you can buy partial coins.

or bitcoin etfs

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I'll start with the ETF route. Any good ones you know?

Well said.

Etha or ibit are both I share etf's. Both solid options if you go that route.

1) Avoid debt like the bubonic plague; 2) live under your means; 3) invest in appreciating assets; 4) read at least one hour per day with some time towards financial literacy. At your age and experience, start with a simple fund that mimics the S&P 500. Then branch out and invest in companies as your implement #4 above. If you do these things, you'll be able to buy and sell most of your acquaintances in fairly short order.

Bobaloo said:

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1) Avoid debt like the bubonic plague; 2) live under your means; 3) invest in appreciating assets; 4) read at least one hour per day with some time towards financial literacy. At your age and experience, start with a simple fund that mimics the S&P 500. Then branch out and invest in companies as your implement #4 above. If you do these things, you'll be able to buy and sell most of your acquaintances in fairly short order.

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He is right. Avoid debt and if you cannot help it, pay off as soon as you can. Don't be like some people I know and go "I can double this money in the market, why pay it off quickly?". Problem is this is okay if markets always go up and in good times when you have a job. When sheet gets real, life will be miserable with debt. Pay off and you will be very happy. I paid off all my debt in 2018 and just have revolving credit card which I pay every month.

His advice about ETF that mimics S&P is also spot on. That is how I made my money, not by buying company stock. Look at VOO or SPY and just buy and forget.

KEY POINT: Ask yourself if you want to have "fun" in the market OR "make money"? You cannot do both. If you want to have fun, then buy company stock, options, do weird stuff and see if you got it. If you just want to make money, it will be boring but you will make money when you buy index funds. I asked myself that 11 years ago, got the answer and made money ever since.

My belief is that it's a little more nuanced than "avoid debt". My personal advice is to avoid BAD debt. I define bad debt as revolving credit card debt, high interest debt, etc.

It makes little sense to me to buy a car outright in cash (for example) if I can qualify for a 1% interest loan and money market accounts are paying 4-5%.

I agree that paying off CC balances monthly is a must because of the exorbitant rates that exist on cards, and the ability to build good credit over time by paying timely and keeping debt to credit ratio low. This be extension leads to increased credit scores and and the ability to put one's self in the position above. All of this is especially crucial for young people in their 20's.

The right debt can be used to your advantage.

Also definitely agree on starting off with lost cost index funds / ETF's as a great approach.

These are the things I will be telling my children when they are your age:

• Spend less than you earn, invest the surplus, and avoid debt: This is the foundational formula for building wealth. Live below your means, track your spending, and focus on needs over wants.
• Invest in low-cost index funds for long-term growth: Avoid complex investments and actively managed funds. Focus on broad-market index funds, such as Vanguard's VTSAX (or VTI) or Fidelity's FSKAX (Total Stock Market Index Fund), which offer diversification and lower fees.
• Embrace the power of compound interest and a long-term mindset: Start investing early and consistently, even with small amounts. Let time and compounding work their magic. Don't try to time the market; stay invested through market fluctuations.
• Achieve financial independence and "F-You Money": The goal is to accumulate enough passive income from your investments to cover your living expenses without needing to work, giving you the freedom to live life on your own terms. A common guideline for financial independence is having 25 times your annual expenses saved.

• Avoid "bad" debt at all costs: Debt is a major obstacle to financial independence, trapping you in a cycle of payments and limiting your ability to save and invest. Prioritize paying off existing debt, especially high-interest debt.

1% dealership financing on popular models? Where?

RogueAg said:

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My belief is that it's a little more nuanced than "avoid debt". My personal advice is to avoid BAD debt. I define bad debt as revolving credit card debt, high interest debt, etc.

It makes little sense to me to buy a car outright in cash (for example) if I can qualify for a 1% interest loan and money market accounts are paying 4-5%.

I agree that paying off CC balances monthly is a must because of the exorbitant rates that exist on cards, and the ability to build good credit over time by paying timely and keeping debt to credit ratio low. This be extension leads to increased credit scores and and the ability to put one's self in the position above. All of this is especially crucial for young people in their 20's.

The right debt can be used to your advantage.

Also definitely agree on starting off with lost cost index funds / ETF's as a great approach.

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Why is revolving credit card debt bad if I pay it off every month? It is bad only if you don't pay it off and it accrues big interest and late fees.

It is not bad to get a low interest loan when buying a car if you don't take other loans. If you have 3 payments going on at the same time, it will get messy. I am in the market for a used car and the dealership told me it is about 10% now where I live. Seems high.

You are all missing the forest for the trees. This is 21 year old summer internship money. Say he drops it in as noted

$1000 up front and $100/month until may 2026? We are talking a total of $2200 total. Keep it in cash. And start the investing with your first post graduation check.

For someone starting on their financial journey, I'd suggest getting a cash back credit card with no annual fee, put everything on it and pay it off each month. Nothing at all bad about that. Boosts the credit score, is convenient, and puts money in your pocket.