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 Dear
Dr. Don,
My fiancee and I are 22, and recent college grads.
I currently make $50,000 net, while she makes
$35,000 net. We've made the decision to save all
of her income and live solely on mine.
What is the best way for me to maximize this investment so
that I can reap the benefits in my 40s? I don't
necessarily mean retire in my 40s, as that is
unrealistic. But I would like to have a nice nest
egg during that time in my life. Our goal is to
continually reinvest her money.
Thanks,
-- Erik Egalitarian
 Dear
Erik,
First, let me give you some marital advice a little early. Don't talk about investing her paycheck so that you can reap the benefits and for you to have a nice nest egg in your lifetime. You're a team. Think like a team.
That said, salting away income in
your 20s to get a leg up on retirement and other
life goals makes perfect sense. It's a message
that the financial planning community is trying
to get across to people in their 20s and 30s,
but it doesn't seem to be taking hold.
If you aren't going to get a pension
-- Social Security and Medicare benefits have
a measure of uncertainty -- and health care costs
are skyrocketing, then you need to take the reins
and start working on that nest egg in the early
years of your career rather than putting it off.
You comment about reaping the benefits
in your 40s strikes a wrong chord for me. If you're
not retiring, then what are your plans for the
money? It's important because my standard advice
would be to maximize your contributions to tax-advantaged
retirement accounts before funding taxable investment
accounts, but I wouldn't recommend that if you
are planning on cashing in early.
On the investment side, people early
in their careers often tend to be too conservative
with their investments. You're investing for the
long haul and you need to earn more than the inflation
rate to stay ahead of the game in terms of purchasing
power. That typically means investing a healthy
portion of your retirement money in the stock
market.
Best wishes to you and your fiancee.
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