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I’m 19 and working as a stripper part time right now and I make 60k a year, and I plan on doing so for the next 7 years. I have 15k saved up, but it’s just in a bank account.

I’m also in college majoring in nursing. I have scholarships and my parents are paying for the rest of my school costs so I won’t have any student loans. I don’t have any debt or loans or anything, and I’m pretty frugal.

I don’t know anything about investing or stocks, so I was wondering what I should do?

I’ve heard about Roth IRAs and how it’s beneficial for young workers whose tax brackets will go up later in life, but would it be good for me since nurses make not much more than I’m making right now?

What other kinds of options are there for low risk high interest?

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  • I just want to point out that the reason this is a duplicate is because the occupation isn't relevant for this question.
    – TTT
    Nov 28, 2017 at 15:47
  • @TTT I was tempted to edit that out of the question for that reason (and to avoid irrelevant answers)
    – D Stanley
    Nov 28, 2017 at 17:04
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    @DStanley - if anything, the 2nd to last sentence/question might be a good question on it's own: "Is a Roth IRA still a good idea if I don't expect my income to ever increase the in future?" I think that by itself would make this question salvageable, though I haven't checked that for dups yet.
    – TTT
    Nov 28, 2017 at 17:27
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    I disagree that occupation is irrelevant. If someone came here and said, "I make $60k a year and am planning to switch to working as a nurse when I finish school." The first question I'd have is "What are you doing now?" She (or he, although most strippers are female) has one part time occupation that pays well but will end within twenty years whatever she wants. And is looking to start another occupation that takes more hours but may pay better eventually. She's not just starting her career. She hasn't started it yet. And her resources are different.
    – Brythan
    Nov 29, 2017 at 2:25
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    This is asking for advice on pre-career income. 401(k) is not available. I disagree with Brythan, current occupation doesn't matter, except that it is not realistically sustainable over the long term, and there's not much growth potential in it.
    – Xalorous
    Nov 29, 2017 at 17:48

2 Answers 2

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Certainly reading the recommended answers about initial investing is a great place to start and I highly recommend reading though that page for sure, but I also believe your situation is a little different than the one described as that person has already started their long-term career while you are still a couple years away. Now, tax-advantaged accounts like IRAs are amazingly good places to start building up retirement funds, but they also lock up the money and have a number of rules about withdrawals.

You have fifteen thousand which is a great starting pot of money but college is likely to be done soon and there will likely be a number of expenses with the transition to full-time employment. Moving expenses, first month's rent, nursing exams, job search costs, maybe a car... all of this can be quite a lot especially if you are in a larger city. It sounds like your parents are very helpful though which is great.

Make sure you have enough money for that transition and emergency expenses first and if there is a significant pool beyond that then start looking at investments. If you determine now is the best time to start than then above question is has great advice, but even if not it is still well worth taking some time to understand investing through that question, my favorite introduction book on the subject and maybe even a college course. So when you land that first solid nursing job and get situated you can start taking full advantage of the 401K and IRAs.

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    Roth IRA has the distinct advantage of allowing withdrawal of contributions (principal) without penalty. So it's not as penalty bound as 401(k). So an IRA does not lock up the money as tight as you portray. OP has already looked at some of what you mention here, but implies 7 years of dancing, probably 4 years of undergrad followed by 3 years of nursing school. OP has a job which pays far above expenses and is looking to make a nest egg while in school. OP should focus on Emergency fund, Roth, taxable portfolio, with a budget for entertainment/travel/hobbies. Using the resources you linked.
    – Xalorous
    Nov 29, 2017 at 17:46
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You're in a good spot: making good money with prospects for that to continue for the foreseeable future. Even if/when you quit dancing nursing pays quite well.

Leaving all that money in a savings account is a mistake. At a minimum:

  1. Open an IRA account at any of the discount brokers (Schwab, Fidelity, etc). Roth is fine to start, once your taxable income goes up consider switching to a traditional IRA. Max out your IRA every year.

  2. Invest in low-fee index funds. There are frankly too many options these days, but an S&P 500 Index fund is almost never a mistake.

  3. Open a regular taxable investment account where you can invest additional money.

  4. Leave some cash/savings for emergencies. But if you do #3 you can always sell some investments in a cash emergency. Yes, it may lose money in the short term, but given your steady income, not a huge concern.

I think if you read all the investment advice out there, you'll see a familiar theme along these lines. Your nest egg will grow considerably when you invest.

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  • For #2, the broader the fund, the better. Total Market Index funds are even better than S&P 500 funds. Also, OP should read up on FIRE and drop by bogleheads.com to read up on how to set up a "lazy 3 fund" portfolio (#1 and #3 each call for a portfolio) Finally, #4 is the #1 priority. 3-6 months worth of expenses is generally recommended, though in OP's case I'd go to 6 months, no question, because an injury could stop the income from dancing. A CD ladder would help to minimize the impact of inflation against the emergency fund and minimize the potential losses if an emergency occurs.
    – Xalorous
    Nov 29, 2017 at 17:39

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