ASK A FINANCIAL ADVISOR!! Money questions? Bring 'em on!!

linsey0689

I am in college right for nursing and I do get some grands from the government for school which isn't much because I am only 20 and my parents make pretty good money. I am not getting any loans and still am able to pay for school (I am a big saver and have a pretty good job and have worked since I was 15), So what do I do with the extra money because I still live at home. It's about 5000 not including tuition/book money which will be due in August. I don't just want to sit on it but I don't want to get it tied up forever.

Depends on how long you want to sit on it. I would recommend investing it in a retirement account and simply do not plan on spending it. The younger you are, the more power compounding interest has. That $5,000, by itself, could potentially turn into $200,000+ over 40 years if invested wisely.

Okay I wasn't looking for that long-term like if I want it in the next 5 years or so what would you recommend? And TheSwoleMinis I would like your option on this too

whierd

Okay I wasn't looking for that long-term like if I want it in the next 5 years or so what would you recommend? And TheSwoleMinis I would like your option on this too

You -could- invest it in an index or mutual fund for 5 years, but you'd be more subject to the ups and downs of the market than you would over a period of 40 years. Or you could do CDs/bonds, which aren't even really worth it with the crappy interest rates these days.

Honestly, just put it in a Money Market account for now and treat it as an emergency fund.

MinMin97

Hilarious!

JenCatwalk

Ok... Well I'm pretty young, saving saving saving my money. Extreme penny pincher here! Im saving so when I get old I can retire with or without SSC.. so question I have is.. what can I do to make my money work for me? Where do I start? I know I know.. silly question. :sad:

Open a Traditional or Roth IRA and start investing it after you have eliminated your consumer debt.

Well thats simple enough. Lol. With either one, do I have to worry about anyone taking my money? Government, student loans, banks?

I mean, I understand about eliminating consumer debt first, and only have about 4000 in student debt. I don't know about what the government can do and not do though.

whierd

Ok... Well I'm pretty young, saving saving saving my money. Extreme penny pincher here! Im saving so when I get old I can retire with or without SSC.. so question I have is.. what can I do to make my money work for me? Where do I start? I know I know.. silly question. :sad:

Open a Traditional or Roth IRA and start investing it after you have eliminated your consumer debt.

Well thats simple enough. Lol. With either one, do I have to worry about anyone taking my money? Government, student loans, banks?

Money in most investment accounts are usually untouchable by other entities looking to collect.

whierd

Hilarious!

:huh:

TheSwoleMinister_deleted

I am in college right for nursing and I do get some grands from the government for school which isn't much because I am only 20 and my parents make pretty good money. I am not getting any loans and still am able to pay for school (I am a big saver and have a pretty good job and have worked since I was 15), So what do I do with the extra money because I still live at home. It's about 5000 not including tuition/book money which will be due in August. I don't just want to sit on it but I don't want to get it tied up forever.

Depends on how long you want to sit on it. I would recommend investing it in a retirement account and simply do not plan on spending it. The younger you are, the more power compounding interest has. That $5,000, by itself, could potentially turn into $200,000+ over 40 years if invested wisely.

Okay I wasn't looking for that long-term like if I want it in the next 5 years or so what would you recommend? And TheSwoleMinis I would like your option on this too

If you need it to be accessible in the next 5 years I would stick with a high-yield savings account or money market. Check bankrate.com for the best savings account rates.

linsey0689

I am in college right for nursing and I do get some grands from the government for school which isn't much because I am only 20 and my parents make pretty good money. I am not getting any loans and still am able to pay for school (I am a big saver and have a pretty good job and have worked since I was 15), So what do I do with the extra money because I still live at home. It's about 5000 not including tuition/book money which will be due in August. I don't just want to sit on it but I don't want to get it tied up forever.

Depends on how long you want to sit on it. I would recommend investing it in a retirement account and simply do not plan on spending it. The younger you are, the more power compounding interest has. That $5,000, by itself, could potentially turn into $200,000+ over 40 years if invested wisely.

Okay I wasn't looking for that long-term like if I want it in the next 5 years or so what would you recommend? And TheSwoleMinis I would like your option on this too

If you need it to be accessible in the next 5 years I would stick with a high-yield savings account or money market. Check bankrate.com for the best savings account rates.

if i were to go with a cd which is best one that compounds daily, monthly or quarterly? I see all this different once which I don't really understand.

whierd

I am in college right for nursing and I do get some grands from the government for school which isn't much because I am only 20 and my parents make pretty good money. I am not getting any loans and still am able to pay for school (I am a big saver and have a pretty good job and have worked since I was 15), So what do I do with the extra money because I still live at home. It's about 5000 not including tuition/book money which will be due in August. I don't just want to sit on it but I don't want to get it tied up forever.

Depends on how long you want to sit on it. I would recommend investing it in a retirement account and simply do not plan on spending it. The younger you are, the more power compounding interest has. That $5,000, by itself, could potentially turn into $200,000+ over 40 years if invested wisely.

Okay I wasn't looking for that long-term like if I want it in the next 5 years or so what would you recommend? And TheSwoleMinis I would like your option on this too

If you need it to be accessible in the next 5 years I would stick with a high-yield savings account or money market. Check bankrate.com for the best savings account rates.

if i were to go with a cd which is best one that compounds daily, monthly or quarterly? I see all this different once which I don't really understand.

Don't even bother with CDs.

anemoneprose

Serious question...I enjoy my toys now and spending my money now. I have a small savings enough to get me through a month if I ever got laid off. I save what I can every month, and I've paid off and I'm working to pay off credit cards right now. The problem is I'm still in pretty big debt with 2 cars, RV, student loans, medical, fiancé's defaulted student loan, and now the IRS. I am still renting and don't have enough for a 10% down payment on a home (plus we don't know if we will be living in this area in the future). I'd like to go back to school to earn more money, but that means taking a huge cut in my current pay and racking up more student loans. I also want to buy more toys like a boat and trike. We found out I'm pregnant and I of course want to make sure that child has everything he/she will need braces, car, vacations, college. I'm under the belief spend it now while your young and can enjoy it. I have already planned I will be working until my late 70's. There probably wont be a retirement because it will probably be spent.

I guess what I'm asking is with so many options where do I go? I am not interested in live like a pauper saving every penny. I work too hard for my money not to enjoy it. I like the good things in life. I want the good things in life. I want this child to have what I never had.

- consider relocating to 1) a well-run city w the infrastructure to support a decent quality of life (cheap & comprehensive public transport - could mean getting rid of one car!; parks; accessible arts/entertainment) and/or 2) a city it's cheap to live in (& has jobs)
- the most important things you can offer your kid are love and stability. if you give her/him those, s/he is more likely to be able to get that other stuff for him/herself. nurturing competence, supporting interests, engaging in his/her education, those are your best investments. the rest is gravy
- consider all possible alternative educational upgrading options for yourself (e.g., part-time)
- redefine what 'enjoyment' means. stuff =/= happiness (though yes it is nice)
- absolutely prioritizing: you can't have it all. choosing one thing (more education for yourself) unfortunately does mean limiting others. (i like quality things too, have gone back to school. it hurts, believe me, i know! change your stuff-getting ratio. get *one* excellent thing every few months, vs three good things every month.)
- don't buy the boat!

gogojodee

Bump

Lyadeia

bumping to read later

tuckerrj

What is a reasonable formula for calculating if your IRA/401K & pension are adequate for retirement? Normally we're told that we'll need to save enough so that a 4.5% annual withdrawal (along with any pension or SS) replaces 70% of our pre-retirement income. Is that reasonable?

Silvara_11

I will be a grad student, starting this fall, and I'm getting a "parent loan." They want me to have life insurance just in case something happens and I, being dead, am not able to pay them back the $20,000. What kind of life insurance should I get? Keeping in mind I am a poor grad student.

On that note, any advice for me regarding budgeting, since I will need to work to support myself while I'm in school?

I'm a master at budgeting.

Don't. Buy. Stuff.

But, but, but.... food.... and more food...

No, you're right. I just have to stop being a baby. I'll buy food when I'm rich. But you are right, I gotta get those little expenditures in check.

So may ways to save as a student. For one do all your laundry at home so you save mega bucks from not spending at Laundry mats. Also, tell your mum how much you love her cooking so she is encouraged to send you loads of home cooked food in hampers to school or pack up a bag of food when you visit. You can always portion control and freeze it.

Other than that I used to live on cereal, KD and coffee. Find the section in the grocery store where they put the times at massive discounts as their sell by date is on the day - I still stock up at that section if you freeze on day you can eat it later.

steal toilet paper from school as covered in your tuition ;-)

mperrott2205

I want to get into trading because i want to get rich and I'm naive. Tell me how to Forex please?

gmove

lol!

Do I need to pay my bills? Or is it just a friendly suggestion?

whierd

What is a reasonable formula for calculating if your IRA/401K & pension are adequate for retirement? Normally we're told that we'll need to save enough so that a 4.5% annual withdrawal (along with any pension or SS) replaces 70% of our pre-retirement income. Is that reasonable?

Well, I would recommend saving enough so that a roughly 5% draw replaces 90% of your income. I do not want my life to change much in retirement.

onedayatatime12

This is very useful. And very generous on your part.

1) If I close a credit card account, which has a high interest rate (the reason I want to close it) will my credit score decrease? This is my 1st credit card, and all my payments are on time, and have been paid off in the full amount.
2) How often should you check your credit score? Once a year, or twice a year?
3) With the economic meltdown, the number of student loans given out are significantly decreasing. In what ways can a student increase the chance/possibility of getting a loan? (In the $200K+ range)

Thank you.

1. Yes, there will be a temporary hit. Depending on how many credit cards you have, it may be worth it to simply stop using it. Part of your credit score is based on aged accounts, as well as available credit to debt ratio on each account.

2. I check mine three times per year. You can receive a free copy from each Bureau once per year, so if I get one copy from one Bureau every 4 months, I can keep them on a rotating basis.

3. I would recommend NOT taking a loan if you can help it. If you are a new student, apply for every grant/scholarship you can and take your first two years at a local CC and transfer the credits to a university. Work while you're in school. The excuse that you need to focus on studying is B.S. most of the time. Plus you will be gaining invaluable work experience which betters your chances of landing a job upon graduation.

1. Looks like I'm not closing the account then!
2. I think I'll do the same then; I always thought it would decrease if I went to check it more than once a year.
3. Okay.. I'll have to think about that, but thank you for all your advice! I appreciate it.

tuckerrj

What is a reasonable formula for calculating if your IRA/401K & pension are adequate for retirement? Normally we're told that we'll need to save enough so that a 4.5% annual withdrawal (along with any pension or SS) replaces 70% of our pre-retirement income. Is that reasonable?

Well, I would recommend saving enough so that a roughly 5% draw replaces 90% of your income. I do not want my life to change much in retirement.

If I'm already contributing 12% into my 401k, I'm already used to living on 88% of my income. My tax liability will be less due to my reduced income. My expenses will be reduced because, in my case, I'll be driving 350 - 400 miles less per week. Sadly, I'll have to pick up my own health care costs. Which may negate all of these reduced expenses.

MommaWheezy

How to have always have money..."Get a hair cut and get a real job, clean your act up and don't be a slob, get it together like your big brother Bob, and get a hair cut, and get a real job."