[00:00] Nick is in New York City. Hi, Nick. Welcome to the day. Oh, to the Ramsey show. Hey, what's up? How you doing, Dave? I wanted to ask you, I'm 22, turning 23 this year, and I wanted to start saving for my retirement.
[00:16] My company doesn't offer a 401k plan or anything else. So I was interested in what your thoughts are on what kind of IRA I should get into a traditional one or a Roth one or something like that.
[00:28] Or if you have a better solution, I would love to hear it. Well, good for you, man. You're way ahead of the curve to be working on this at your age. Excellent. So are you out of debt? Yeah, I mean, right now the only payments I make are on my phone
[00:43] watch and that's about $60 a month. Okay, your phone. What? Phone watch. My cell phone and my smart watch. Oh, I'm sorry. Together, they cost about $60 a month. That's just the cellular service. Okay.
[00:56] Yeah, and how much money do you have in savings? Well, in my personal savings, I have like a $2,000 about $3,000. But when I was in the eighth grade,
[01:10] I got hit by a truck. So when I was 18, I got some money from that and I invested in stocks about $43,000 in single stocks. Oh, yeah, and e-trade and stuff like that. Okay. All right.
[01:27] All right, well, before we move into investing, I need you to have three to six months of household expenses. Are you on your own or you live with mom and dad? Oh, no, I still live with my parents. Okay. All right. Your $3,000 probably is your emergency fund.
[01:42] All right. To start with Nick, let's just back up. The first thing is I don't do single stocks. I know a lot about them. I buy investments. I've got hundreds of millions of dollars of investments. And but I don't buy single stocks because I don't like the risk associated with that.
[02:00] And the game you're playing, there's a lot of risk. Now, if someone is really loving it and you obviously have a a knack for it and it's something you want to feel with, no more than 10% of your net worth.
[02:13] So in your case, about $2,000 worth is about all you ought to have in single stocks. You're taking too much risk in my opinion. Okay. So I would move that towards mutual funds. And then as far as starting. Yeah, I think ETFs, it's not only single stocks, but it is mainly single stocks.
[02:30] Yeah. Okay. And then the next question is when are you planning to move out and what money do you need to do that? I don't really have a plan on moving out yet. I'm still like I just started working. And I probably
[02:47] would want to move out between 26 and 28 years old. Possibly. Yeah. I'm really not I'm not really sure on what do you mean with that? Yeah. What do you make? About 15, 16,000 a year.
[03:04] What are you doing? I'm working in a work study program right now. Yes. So I'm making a lot of when will you complete the work study program? Two years, two years, two and a half. Okay. When you get your income up
[03:16] to where you can, I don't want you 28 years old and your mother's basement. They get out and get going. You do not need to start your Roth IRAs yet. You need to you need to pile up money to make the transition out of your household and complete your studies and complete your career, get your career going. Then
[03:32] you need to start. And I would start with a Roth IRA in good growth stock mutual funds. I love that you're asking the question, but you're a little bit early in your process, not in your age, but in your
[03:45] process. You're in the middle of transitional things that need to happen before you start investing. Yeah. I'm just trying to wrap my head around that spirit and also that it seems it just seems
[04:02] out of balance. You don't hear that very often. It's someone's thinking so strategically and so far ahead. And also I live into my parents house. I'm about 30, 28. It's always the other way around.
[04:15] I've got people like racing out of their parents house the moment they can and buying a way big to be a house or truck and saying, Hey, man, you got to have a future too. And so this kind of flip around a little bit. Yeah. Yeah. And get your own place. Get your own place. As soon as you're,
[04:28] you know, you probably can do that on 15K in New York City. Okay. But when you get this work study thing going and you can get your income coming up the next 12 to 18, 24 months or whatever, then let's move out. Get your fully funded emergency fund at that point of three to six months of expenses,
[04:42] remain and stay debt free through that whole process. And then you would start investing when you're stepping into your bed into your career. And 15% of your income is what I would do there in good
[04:54] mutual funds with a good Roth IRA.