- Frugal Investing - 4 Updates
| Beaver_Fever@live.com: Jul 06 10:39AM -0700 I am making way too much money right now. I don't even want to spend it if I can help it but I should be earning interest on it. I am so unprepared but I never thought this day would come. What do I do? |
| John Weiss <jrweiss98155@comcast.net>: Jul 06 11:49AM -0700 > I am making way too much money right now. I don't even want to spend it if I can help it but I should be earning interest on it. I am so unprepared but I never thought this day would come. What do I do? First pay off all your credit card debt. Then pay off any other loans that have an APR of 3% or more. Then stash away in a SAFE account (e.g., Money market savings account, CDs, or combination) AT LEAST 3 months gross wages. After continuing per below, increase that to 6 months over time. If you can get CDs for higher interest than Money market, split them up so they mature every 2 months or so, and automatically renew. Are you contributing to an IRA (Roth preferred, if eligible) AND 401k (if employer sponsors one)? FIRST set up contributions for the max 401 contribution that your employer matches (even a partial match) - a 50% match = an IMMEDIATE 50% gain! Go to Vanguard.com and set up an IRA. Vanguard is noted for having just about the lowest management fees in the industry, as well as a wide range of GREAT investment options. They will help you set up a reasonable financial plan. Their reps are very helpful, and will give you good advice for a startup IRA. They are salaried, so they won't steer you into bad investments to reap commissions. If you still have money to invest after those, set up a regular brokerage account at Vanguard. Start by buying an S&P500 or NASDAQ Index fund, and diversify as you become more familiar. |
| Beaver_Fever@live.com: Jul 06 12:22PM -0700 On Thursday, July 6, 2017 at 11:50:12 AM UTC-7, John Weiss wrote: > On 7/6/2017 10:39, Beaver_Fever@live.com wrote: > > I am making way too much money right now. I don't even want to spend it if I can help it but I should be earning interest on it. I am so unprepared but I never thought this day would come. What do I do? > First pay off all your credit card debt. No credit card debt. > Then pay off any other loans that have an APR of 3% or more. No loans. > per below, increase that to 6 months over time. If you can get CDs for > higher interest than Money market, split them up so they mature every 2 > months or so, and automatically renew. Right now it's about 40 months wages just sitting in a brokerage account. We're talking about the minimum wage job I no longer have. But then it was to keep living expenses safe in case my other venture derailed until I could figure out what to do with it. But now it's time to do something with it. > Are you contributing to an IRA (Roth preferred, if eligible) AND 401k > (if employer sponsors one)? No > FIRST set up contributions for the max 401 contribution that your > employer matches (even a partial match) - a 50% match = an IMMEDIATE 50% > gain! I don't have a job. Kinda not into an IRA because I don't think I am going to make it that long. > reasonable financial plan. Their reps are very helpful, and will give > you good advice for a startup IRA. They are salaried, so they won't > steer you into bad investments to reap commissions. Awesome! > If you still have money to invest after those, set up a regular > brokerage account at Vanguard. Start by buying an S&P500 or NASDAQ > Index fund, and diversify as you become more familiar. Yeah I am so busy and sleep deprived and suffering from information overload so I just kept it on the back burner while I earned only like $20 interest on way too much money. As of now I am ready to just peel off living expenses and some working capital and just keep investing the rest. My overall goal is really just to see how much money I can die with. |
| John Weiss <jrweiss98155@comcast.net>: Jul 06 12:25PM -0700 > Right now it's about 40 months wages just sitting in a brokerage account. We're talking about the minimum wage job I no longer have. > But then it was to keep living expenses safe in case my other venture derailed until I could figure out what to do with it. But now it's time to do something with it. OK. Keep about 12 months living expenses. Start investing the rest. |
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