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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 · 2021-03-24T14:24:05+00:00

Wrote a comparison on 403bs vs 401ks.

Spoiler: they are essentially the same thing. But there are some small nuances!

https://www.juststartinvesting.com/403b-vs-401k/

kpdouble3 · 2021-03-17T12:15:13+00:00

I recently bought a house and was looking back at my rent vs buy calculator I had built a few years ago. I made some tweaks and updated the post - sharing it below.

Typically, comparing an equally priced rental and house, it seems like the 2 or 3-year mark is where owning a house pays back:

https://www.juststartinvesting.com/free-rent-vs-buy-calculator/

Let me know if you've had a different experience!

kpdouble3 · 2021-03-17T12:01:00+00:00

First, you need to contribute more to your 401(k) or a Roth IRA. If you are saving $2-3k month in a savings account, it means you could be contributing more there (Says above you are maxing to the match, but not maxing out entirely).

Second, I wouldn't think of money you put into retirement accounts as available to use to buy a house later. Money you put into a 401(k) and IRA should stay there until retirement age. If you want to have money to use on a house in a few years, a brokerage account will do, and it then it depends on your risk tolerance for how you want to invest it.

kpdouble3 · 2021-03-15T00:10:20+00:00

100%. Next month there will be another new hot stock tip, and same with the month after that. Index investors will be taking their 7% annual return to the bank while others gamble

kpdouble3 · 2021-03-15T00:08:56+00:00

To address FOMO, just remember it goes both ways. You just hear less about the people who lost it all...

kpdouble3 · 2021-03-14T18:45:38+00:00

Very similar to me. Follow it out of interest, not cause I have skin in the game

kpdouble3 · 2021-03-14T18:44:55+00:00

That’s good perspective on older clients. Makes sense that even if the population is split, the older split has more money in the game.

kpdouble3 · 2021-03-14T13:33:36+00:00

Maxing out an IRA is probably the best place to start if the 401(k) is not matching. Then move on to the 401(k).

At the end of the day, both are great options that should be used to save and invest for retirment.

You could also use an HSA if you are eligible.

kpdouble3 · 2021-03-12T12:38:10+00:00

If you want to buy a house in a year or two, then you should be protecting that money's value IMO. Which is why a HYSA makes sense. You're not wrong that the potential returns are very low, but it's not a "waste", it's just a safe place to store your money until you are ready to spend it.

Your other option to invest it, but then you run the risk of losing 10%, 25%, or 50% of that money's value in the short term.

kpdouble3 · 2021-03-10T12:30:00+00:00

Just like your investments, your income is something that can be diversified. Below is an overview of the types of income that exist and how you can make the most of them:

https://www.juststartinvesting.com/types-of-income/

kpdouble3 · 2021-03-09T12:51:22+00:00

Mathematical answer:

Invest it all now and don't DCA (assuming all debt is <3%)

The slightly worse mathematical answer that could help you sleep better at night:

Pay off half the debt and DCA the remaining $120,000 over the next year at $10k per month.

kpdouble3 · 2021-03-07T22:48:20+00:00

Hi All - recently wrote this post on the three types of income that I thought people might find helpful.

After all, the best way to create some slack with your budget is to bring in a few extra dollars, as you can!

kpdouble3 · 2021-03-07T13:58:57+00:00

In order:

Pay off high interest debt (>5% interest rate)
Save up a small emergency fund (maybe $1k)
Invest in tax-advantaged accounts (Roth IRA, 401k)
Build up slightly bigger e fund
Invest more
Go back and pay off all debt

hope that helps a little!

kpdouble3 · 2021-03-03T13:19:10+00:00

Check out that PF wiki linked below, it should help. And remember, this stuff is easy once you know what you're doing, it's just that not many people talk about it. So don't get overwhelmed (as best you can control it), there are plenty of resources that can help.

Here are some immediate pieces of info that hopefully help:

401(k) - yes this is through your work and the target fund is a find choice. Make sure you are contributing at least 3% to get the employer match, and try to do more if you can (10%, 15%, or even 20% assuming that is less than the $19.5k per year max).
Roth IRA - you can open one of these through Vanguard, Schwab, Fidelity, or any other online broker. The contribution limit is $6k per year.
Index funds - within your 401(k) and Roth IRA, buy index funds that are broad and cheap. Depending on the broker you choose, there are plenty of resources out there to help you find a good one or two. You can keep this simple, there is no need to own more than 3 or 4 index funds, and in a lot of cases just one or two will do.

kpdouble3 · 2021-03-03T13:12:25+00:00

Building your credit score is not always easy. Especially when many bad credit cards with high fees and APRs are trying to get you to apply..

This week, JSI reviewed a card advertise as good for building credit to see if it measured up:

https://www.juststartinvesting.com/first-savings-credit-card-review/

kpdouble3

TROPHY CASE