Tuesday, March 14, 2006

Tips for the Newcomers to workforce

I like morning star articles. especially this one about the six things for new college grads. i am about to reenter real job in another 2 months. Always remember that the power of compound interest is remarkable. To quote A 22-year-old who invests $2,000 per year and earns a 5% annual return on that money will have approximately $226,000 when she reaches the age of 59. Were she to wait until 30 to begin saving, she'd have just $139,000 when she's 59. So save from the beginning.

Tip one does not apply to me, as i dont have any debts. Also i dont agree to the advice to have only one credit. If u are financial prudent, then you should have atleast 2 credit cards. i have close to six and i plan to increase it to eight. My credit card strategy is as follows.

  1. Chase Visa - The main card 0% APR till May 2007. i buy everything using this one and put an amount equivalent to the purchase amount into my HSBC account.

  2. Citi premier pass - used for purchasing airline tickets. I get 1 reward point for every 3 miles I fly

  3. Amazon chase visa - rarely used for purchase at amazon, took it for the $30 reward. Will close it in another two years

  4. Wachovia visa- very rarely used. First credit card, never going to close

  5. Sams club - for use at sams club. I have stopped going to sams club so I stopped using this card. will close it when i move to seattle and take costco membership.

  6. Hechts - not used more than thrice, took it to get 15% off while purchasing suit and other things. will close it in another two years time
i plan to take citi's drivers edge card and apply for a new credit card each year to take advantage of the 0% APR deal.

Tip 2 is important. i plan to max out the 401K and Roth IRA. Tip 3 does not apply to me, as i already have an emergency fund established. I am not sure about tip 5, with auto invest option. i might do it. Tip 6 is always true. It sure is a continuous education.

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