I'm a fairly well reviewed, fairly well paid (10-15k/month) escort. I have just over 100k saved and I live very modestly (3k in monthly expenses, give or take). I'm under 25 and I would like some financial advice. Other than spending and saving, I'm unsure of what to do with the money I'm making. I plan to remain in the "business" for two more years and I'd like to have something to show for all my hard work.
Assuming you were in my age bracket and financial position what would you do? Advice from older men and women would be awesome! Thanks!

don't ask for advice here. Go see a 'real' financial advisor and have your business plan in line to 'explain' yourself and earnings. She (or he) has a confidentiality duty owed to you by default.

-- Modified on 8/31/2015 8:10:17 AM

Proper investing is really boring and will make your eyes glaze over, but it's the best thing you can do at your age. Open Vanguard investing and IRA accounts. Max out your yearly IRA contributions and put most of your money in index funds (S&P 500, total market, etc.). Betterment.com is a great site for parsing all of this stuff and getting started.  

The advise was, that I should have at the very least 6 months of normal living expenses in my savings account, then after that invest wisely, for someone like myself investing wisely means having a financial advisor that I trust as I don't know or care to know the market.

I am in general not a fan of financial planners.  Generally if you have common sense and spend a bit of time doing your own research you will reach conclusions that are very similar to what the financial planner will charge you for.  There are exceptions of course.  But it will take a good bit of effort to find a worthwhile financial planner.

my dear.  Your mature approach to your financial future will facilitate a happy life.  Money isn't everything but it makes everything easier.

For every dollar you invest, you will have 2 dollars in 10 years (if you invest wisely), If you have paid your taxes or you can account for the money in an IRS audit then buy a house or an apartment, but you want to make sure you won't need the money for the next 3 to 5 years. Commission for real estate is very high (5-6%) so it's not a good idea to buy and sell in less time (normally). For long term investment, it's likely the best 1st investment (for most people) due to leveraging (you can borrow money) and tax treatment (you can reduce your income tax).

and whatever you do, don't ask a CPA for investment advice. lol

Talk to Vanguard and see what you think.  They do a good job and have been around for a while.   Finding a GOOD financial planner is not easy.  They are a dime-a-dozen. You will not know how good he is until it is time to retire.   Don't fall for the " Oh, you are young so we will put you in this high risk stuff". Every 6 months, check to see how your account is doing and pat yourself on the back.

You have a couple of issues to address:
Be sure that you've paid taxes on the money, otherwise your investing will raise some flags.
Get some advice from someone you trust who is knowledgeable.  
As young as you are, invest in the market with solid growth stocks or mutual funds.

Get an accountant to figure out how much taxes u wanna pay, then once u report income, you will be able to start investing, and, I personally recommend the stock market, and diversification. You're at a good age to be a bit aggressive in your investing.  

Financial advisors are pushy and don't have your best interest at heart.  

Posted By: Oldtimemonger

 

Posted By: floxiegirl

I'm a fairly well reviewed, fairly well paid (10-15k/month) escort. I have just over 100k saved and I live very modestly (3k in monthly expenses, give or take). I'm under 25 and I would like some financial advice. Other than spending and saving, I'm unsure of what to do with the money I'm making. I plan to remain in the "business" for two more years and I'd like to have something to show for all my hard work.  
  Assuming you were in my age bracket and financial position what would you do? Advice from older men and women would be awesome! Thanks!

   
 I've made almost every type of investment there is at one time or another. I don't know what city you are in (hopefully not Detroit or some dying industrial town) but nothing has paid off over the long term like my rental properties. Best of all you can always do tax free 1031 exchanges with your properties when you want to trade up.  
   
 This is a long term strategy of 15-20 years. I started in San Francisco a few years after the 1989 earthquake. I could have retired off of it years ago. While SF has been one of the best areas for Real Estate investment, it's not the only area you can make money over the long term.  Since your only 25, you certainly have the time to reach financial independence while you're still young enough to enjoy it.  
   
 I am not a fan of financial planners since most are commissioned salesman who push whatever "canned research"  they make a commission off of.  
   
 Regardless of what vehicles you decide to use for investments, nothing works quite like The Theory Of Contrary Opinion.  
   
 Good Luck

because you are living well below your means.  I know so many older gals who are struggling these days because they had to have this or that (mostly shoes), and did not save.

In the 1960s Boston had a blighted crime filled neighborhood call the South End.  The City, in desperation, sold houses that they had foreclosed on for $1 if the new owner would live there.

Most people here have 9-5 jobs and relatively stable cash flow, neither of which apply to the OP.

GaGambler...

go talk to them about a diversified portfolio of Stocks and Bonds.  Maybe some low-cost Vanguard products.  Of course, after taxes and a 6 month emergency fund are taken care of.

If you invest in the stock market there's an old saying and it's true so far as I can tell: Bulls make money, bears make money, pigs get slaughtered.  This is probably true for any investing you may do be it real estate, bitcoins or whatever.  

but you never considered how much income she is going to have in two years after she ends her hooker career. She may well need the cash reserves while seeking a new career, she may want to launch a business with her hooker bankroll, she might want to do any one of a thousand different things in the next 2-5-10 years. To give a "one size fits all" answer is VERY irresponsible IMO.

but there are soon many rules that come with it.

I had more than one friend who didn't have that when the economic downturn hit, and they would have been hurt if it weren't for uncle Russ coming through with a no interest loan. I was paid back every dime and got some home cooked meals and a few rounds of golf though, so in the end it was a win/win.

A good property can always be sold or in some cases refinanced for extra cash. The chances of another RE crash is remote. If she plans on hooking for 2 more years, she will have enough cash reserves (she says she lives on 3k a month and makes 10-15k) while seeking a new career. Launching a business (unless she has extensive experience in a field) would be way too risky.  

...is not in a position to speculate.  She needs to invest in something with a proven return.  If it's in real estate, it should be in an area that's very desirable right now, not ten years in the future.

YES, MUST pay taxes to make your cash legit.  
Yes, to Vangard.  
Yes to rental property IF you have a handy streak & live close enough to supervise yourself...  and the temperment to stay after things.  
I hung onto my first house & converted it into a rental.  
Mistakes I made:  I didn't keep the rent up with the market.  It was too far away from where I ended up living SO I didn't inspect o0ften enough.  If I were to do again, I'd pick up the rent in person & walk though monthly.  And hire a pro to do repairs...  the tenant was in the repair business but work he did for me was half-arsed.   do not let repairs slide...  loss of rain gutters, cost me major repairs (rotted out sills).    
Despite it all, 30 years later, I got a good payout.   Did better than my IRAs over the same period.  

invest in real estate. Buy property in a high demand area and rent it out to cover rent, taxes, etc.  

...to a great start.  If you decide to go into business, that discipline will serve you well.

You really are rather slow on the draw, aren't you?

Oh wow! Thanks everyone! I wasn't expecting so many responses You all rock!

So Vanguard is a thing I should look into it seems.. I've gotten a few pm's about it and a few have mentioned it in this thread so I will definitely look into that.

this year or next.  

Posted By: floxiegirl

I'm a fairly well reviewed, fairly well paid (10-15k/month) escort. I have just over 100k saved and I live very modestly (3k in monthly expenses, give or take). I'm under 25 and I would like some financial advice. Other than spending and saving, I'm unsure of what to do with the money I'm making. I plan to remain in the "business" for two more years and I'd like to have something to show for all my hard work.  
 Assuming you were in my age bracket and financial position what would you do? Advice from older men and women would be awesome! Thanks!

and never beg to pay for sex...

Seriously? FNMA and Freddi Mac are now buying loans with 3% down and allowing income towards repayment from nonborrowers who live in the same 'household' as the borrowers. What does this tell you? Tells me you're a fool to make a blanket statement like the above categorically.

Who is a licensed, knowledgeable person who has the ability to establish your portfolio and help you come up with a strategy to maintain a healthy and prosperous financial present and future.Typically the main strategy is diversification but that is something he/she will explain. As other have mentioned, and it is just a common sense approach:

Very good point, impposter. Make sure legit money and account activity is extremely impotant.  

I've used a lady for awhile now who's done a great job. Has all her licenses, degrees and is a CFP. It one makes a blanket statement like this, lots and lots of good, talented professionals are immediately eliminated. Is having a CFA designation nice? Sure. Absolutely necessary? Nope. Actually I've met a few CFA's along the way who don't know as much as my advisor does. Not even close. The rest of your advice I do in general agree with however.  

Partially agree with you. Those CFA or professional financial advisor knows very little about stock trading. Their recommendations are no better than the recommendations you get from internet, and their recommendations and advise are all over the internet for free.  In term of stock investment, I would rather put my money in S&P 500 index than listening their advice.

He's the smartest guy around so I wonder who he uses or if he just does it himself?  

For most financial advisors their FIRST and foremost priority is to make money themselves by enticing you to invest in such a way as to MAXIMIZE their commissions. Your financial well-being is second priority. It would be very, very hard for you to find a real honest-to-goodness advisor who is also good at what he does.

You can Invest in stocks:
Very few fund managers have beaten the S&P 500 index in average annual returns. Personally picking a fund to put your money into and expecting it to grow at a decent rate is like gambling. Individually picking stocks is also gambling. You can instead allocate your money such that it mimics the S&P 500 index. You do this by investing in Vanguard index funds. You typically get around at least 7% a year.  

I'll second this. Since you're putting money away for the long haul an index fund is an excellent investment. If you look at the linked chart you can see historically investment in stock is a great way to make some easy money. Just set it and forget it.

The answer to Index Funds is.... IT DEPENDS.  No one really ever knows where we are on the chart until long after the fact... and we could easily be in a bad spot on the chart right now.  This chart, indexed for inflation, is a great example of what I mean.  The poor soul who invested in the market in the summer of 1929, and there were many, and did not get out quickly when they had the chance, may not have seen his money return in value, with inflation taken into account, until the late-50s/early-60... or perhaps even the mid-80s -- if he was not already dead by then.  

osted by eufool101:

Very impressive.

Please don't. Do. Not. Do. It.  

A CFP is more in order for what she needs. She needs someone who can help her understand her money and future scenarios. Keyword = scenarios because I don't think she has a solid plan yet. Scenarios can help her determine what her ROI needs to be to hit those future retirement goals so that she can do some reverse-like decision making and determine how much risk she needs to take on. Once she knows that, she can decide if she can afford to invest time and energy into a PhD vs something faster like flipping a house. Not to say that a CFA can't do this, but IMHO they tend to give very vanilla advice and aren't that creative investment-wise. I think that a CFP and someone with tax planning expertise is the best combo.  

With that much in savings at your age, your first priority is completing your education, and you should pay for as much of it now while and as you can.  Make sure you are savvy enough financially to handle your own affairs...

Re: Oh wow! Thanks everyone! I wasn't expecting so many responses You all rock!

Beware of PMs. They could be from scammers or "financial planners" trying to take advantage of you.

But you failed to answer my point. We ARE in another housing bubble promoted by the Fed and the administrations policies. To buy in now would be foolhardy especially directly in properties. Quit dancing around my point.  

I forgot to mention that  The programs you cited will only be available to low-income borrowers or those living in low-income or minority-dominated areas. That is not going to cause another bubble. From what I've seen some extended minority families do pool their resources to buy homes, businesses etc.

Do you realize you could have just opened your prior post and edited it?

In my company, when I was originally hired in the early '80's, many clerical jobs were available to HS grads, and good performance provided upward mobility.  Not so today...no degree, no interview for someone her age.  Simple as that.  Although I'm not in the medical field, if that were her line of interest, I would advise getting a degree over a certificate in order to provide herself with maximum options.  She has the income, and presumably the time to pursue these endeavors.

1)  $100,000 is not that much in the grand scheme of things, but is a good base if not touched and allowed to grow.  If its your "emergency fund"  (about $20k based on your monthlies) also, then its really not that much.
2)You are under 25.  Do you have another career-and I mean career, not job that will replace all that income.
So based on that, my advice is to keep working as long as it makes you happy or until you can replace all that income.  Of course at your age, marrying well is definitely another career choice.
 

Posted By: floxiegirl

I'm a fairly well reviewed, fairly well paid (10-15k/month) escort. I have just over 100k saved and I live very modestly (3k in monthly expenses, give or take). I'm under 25 and I would like some financial advice. Other than spending and saving, I'm unsure of what to do with the money I'm making. I plan to remain in the "business" for two more years and I'd like to have something to show for all my hard work.  
 Assuming you were in my age bracket and financial position what would you do? Advice from older men and women would be awesome! Thanks!

I'm thinking you've learned a few things about running a business and money management, so why not take the money you've earned and invest it in your own "legit" business: a restaurant, hotel, pet grooming store, or whatever it is you like to do.

College teaches you very little about how the real world of finance works, and in information age we live in, most of the skills you need can be mastered much more quickly on your own rather than learning in a class room. You would be amazed at how little most college grads have learned in college about the world of finance. Trust me I have hired plenty of them.

Not my area of expertise. Too risky for me lol.

I'm not going to sell my house. I need somewhere to live. Its almost paid for and I can afford it so why would I sell it? I don't need the equity to live on and where am I moving to? A hotel? A tent? An apartment?  

My point which you clearly didn't grasp was these qualifiication changes are symptomatic of a market that's getting overheated especially in certain markets. Do you really think that folks with all of a 3% 'investment' in a home are prepared to stick it out through thick and thin if someone with 30% of the income in the house a) loses a job b) dies c) gets disabled or how about d) just stops contributing? What happens then? Exactly the tax payer ponies up. Again.  

The most important thing is to keep 6-9 months worth of expenses in cash in the bank for emergencies. In your case, maybe $20K.

changed his whole philosophy from Warren Buffett style to a sort of momentum  trader. I could not believe it. It was terrible.

It will likely be a waste of time in trying to find someone good. If they are any good then you can't afford them. Just open an account at Vanguard (you can do it online) and start buying S&P 500 index mutual fund or ETF (with money that you won't touch for the next 3 - 5 years). $100k is really not that much so it shouldn't raise any red flag, but I assume you already have a bank account. You can easily write a check and deposit it into your new Vanguard account.

it as much as possible or do it carefully. 1st time real estate purchase do have a higher chance of triggering an IRS audit, but I have never experience any problem when I transfer money between my bank and my brokerage accounts ($10k+ or $100k+). I did experienced problem when I tried to withdraw $50k in cash (for Vegas). Don't start to deposit a few k if you are just starting out. Start slow with few hundred and vary your amount. You don't want to trigger a "structuring" alert. Odd amount is better (like $320, $435, $766, etc.). Once your account has few k, then you can start increasing your deposit. I hope you don't find it too troublesome. I guarantee it's less troublesome than facing an IRS audit or HS.

-- Modified on 9/2/2015 10:46:54 AM

I am not saying nobody should try, but everyone should knows the odds before trying.