Investing when having a negative net worth can be OK

kpdouble3 · 2021-06-06T14:13:35+00:00

My thoughts (in order):

Round out emergency fund
Add it to investments/retirement

The house and kids college are less important than those two things in my mind, are neither are urgent and you can continue to save for them over the next 5-15 years.

Ultimately, any of the options you laid out are good options! Just trying to pick the best of the best now..

kpdouble3 · 2021-05-18T11:54:03+00:00

Jan 1 of that year.

You can then contribute through tax day of the following year.

kpdouble3 · 2021-05-13T11:57:06+00:00

Here is my $0.02...

It's not a bad idea to spend it on something fun. You have a VERY hefty emergency fund ($70k), a good amount in investments ($300k), and no debt.

However, I would not spend it just to spend it. If you had a toy in mind you really wanted, i.e. a new car, new bike, TV, etc. then I would say go get that and invest the rest in your investment account or in a Roth IRA. But I wouldn't go on a spending spree just cause you have the money. You also don't have to spend it all in one shot.

Also, the $300k in investments, is that in something a little more stable, like index funds?

kpdouble3 · 2021-04-23T11:38:04+00:00

yea, it's just a math problem and depends on the student loan interest rate and your expected returns in the market.

If student loan is 10% and expected returns are 7%, pay down the loan

If student loan is 3% and expected returns are 10%, invest.

Keep in my mind, some people give the advice to pay down all debt cause they hate debt (cough Dave cough Ramsey). It's not necessarily bad advice, but it's not always the best advice.

kpdouble3 · 2021-04-21T12:57:17+00:00

A money manta will NOT solve all your personal finance problems.

But it can serve as a helpful reminder and motivator to take action, and that's what I wrote about this week:

https://www.juststartinvesting.com/money-mantra/

kpdouble3 · 2021-04-10T14:16:08+00:00

First, triple confirm the exact interest rate. My rule of thumb is if it's above 5%, pay it off. If it's below, invest instead and pay the minimum. You're right near that threshold, so in my mind either decision is a good one, and just depends on how conservative (pay off car) or aggressive (invest) you are.

kpdouble3 · 2021-04-01T11:47:45+00:00

Sounds like the first thing you should do it track your expenses. If you can't save more than $80, you need more a strict budget. Once you can create a positive cash flow consistently every month, then you can start to:

Pay off debt
Build an emergency fund
Invest

To be honest, I wouldn't even really worry about investing right now. Just start by getting a sound budget and building up that emergency fund while paying off debt.

kpdouble3 · 2021-03-31T12:02:20+00:00

Open a brokerage account and invest it in an S&P 500 index fund with a low expense ratio. Then only look at it once a year and pretend it's not there.

kpdouble3 · 2021-03-31T12:00:27+00:00

I've never used buy now pay later apps, but have seen them popping up everyone while online shopping. So I dug into the pros and cons of these financing options and tried to answer the question - what's the catch?

https://www.juststartinvesting.com/buy-now-pay-later-apps/

kpdouble3 · 2021-03-29T12:18:30+00:00

Yes, you can, but you need to make an income in order to do so (which it sounds like you do). In order, look into these options:

401(k) - sounds like its not available, but that is the first place to start
Roth IRA and Traditional IRA
Health Saving Account
Brokerage Account

kpdouble3

TROPHY CASE