Ask Paula: "I Feel Like I Don't Deserve My Success. What Should I Do?"

#151: We’re back with another “Ask Paula” episode of the show! As usual, my friend and former financial advisor, Joe Saul-Sehy joins me in answering your questions!

Let’s dive right in.

Hailey:
I just graduated from college with a major in Computer Science and minor in graphic design. The whole time - it was rough. I come from a family that didn’t have a lot to give me going into this journey of getting a college degree. So I did it basically on my own - they gave me things here and there - but college is expensive. I wound up getting scholarships and taking on student loans to get through. It was a lot of hard work. Some days, I wanted to quit. I felt like I was never ever going to see the benefits of what I was doing.

Well, I am now at a point in my life where I was able to secure a job (I started a week after graduation) making $80k a year. Obviously, this is great - this is what you’re supposed to do when you graduate with a Comp Sci degree. But for some reason, I don’t know if it’s guilt or shame, but I feel bad watching my friends and family struggle, while I don’t have those struggles anymore. I find myself asking if I deserve this - to have a nice apartment, to have nice things. Inherently I know I deserve it because I worked so hard, but I don’t know …

My question  is - do you have any advice for me to help me understand what it is I’m feeling? How I can feel better about it?

Chris:
I’m 45 and my plan is to retire early - not super early - at 57. To keep numbers straight, I’m hoping to have a million dollars in a 401(k) and a million dollars in a taxable account with stocks. My thought was to - at 57 since I won’t have any income - to convert the 401(k) over to an IRA and then start converting that to a Roth at the max, keeping me in the 12% tax bracket, which is roughly $77,000, potentially more, and live off of the stock which will be at 15% tax and that shouldn’t go against my AGI because it’s an asset. Then at 67 I would start taking full retirement Social Security. Hopefully by age 70 I’d have very little to none in the 401(k) and most of that money would be in the Roth. Thoughts? Am I overthinking this?

Rose:
My goal is FI in about 5 years. After maxing out my 401(k), I make automatic monthly contributions to a robo-advised fund, specifically a Schwab intelligent portfolio. I like that it rebalances and has tax loss harvesting because I’m in a high tax bracket. To me, it feels somewhat safer than putting everything into VTSAX because it’s diversified, but I don’t fully understand all of the different funds that I’m invested in through the robo advisor.

Should I keep putting money into the robo advisor, or should I switch to VTSAX? Does your answer change at all with ongoing economic uncertainty and the benefits of being balanced across stocks and bonds?

Juan:
I’m 24 and I live in NYC. I just graduated from engineering school and found a full-time position earning $75k/year before taxes. There’s a possibility of overtime so I might be able to make another $5-10k a year.

I have $15k saved in cold hard cash; I have $6k in a Robinhood account which is doing well; and I have $5k in a Wealthfront account. I am planning on maxing out my Roth IRA ($5,500 a year starting now) and I have $2k there already. I also plan on participating in the employer’s contribution for the 401(k) traditional - which is maybe a 4% match.

I don’t know where exactly I should put the money that I’m going to save to get the most out of it (mostly to beat inflation). $75k after taxes is probably around $55k and I plan on saving around 50% of that, or $30k a year for the next 3-5 years.

I live by myself but my expenses are not high. I am very good with budgeting and everything is on track. I just want to get your suggestions/advice on where to put my money or what to do with it starting now. I am going to open an online savings account where I can get at least 2%.