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190

The amount of money you have should be enough for you to live a safe but somewhat restricted life if you never worked again - but it could set you up for just about any sort of financial goal (short of island buying) if you do just about any amount of work. The basic math for some financial rules of thumb to keep in mind: If your money is invested in very ...


142

I am a firm believer in the idea of limiting debt as much as possible. I would not recommend borrowing money for anything other than a reasonably sized mortgage. As a result, my recommendations are going to be geared toward that goal. The top priorities for me, then, would be to make sure, first, that we don't have to go further into debt, and second, ...


137

Here are some possibilities: pay off the credit cards (and don't incur anymore revolving debt) if your employment has a 401(k) or 403(b) fully fund (to the maximum extent % possible) and keep doing that- choose equities (stocks) funds from low cost providers if no employment retirement available, open an IRA, depositing the annual maximum (but do it in ...


110

First-time investors, quite frankly, do not have enough experience to accurately assess their risk appetite. You're willing to "gamble" with that £50/month, but that's because it's just £50, and you're understandably salivating over that "42%". That wears off. Over time, you'll be investing £thousands. (In ten years, you'll have put £6k of your own money in....


107

EDITED after OP added more details. no taxes have been taken out yet. 24% will probably be withheld, taking you down to 38K. The organization that ran the sweepstakes must withhold 24%. It's the law, and of course you have to claim it on your tax return, whether or not they withhold anything. Because they'll withhold, they'll send you a W-2G saying ...


87

Pay off the credit cards. From now on, pay off the credit cards monthly. Under no circumstances should you borrow money. You have net worth but no external income. Borrowing is useless to you. $200,000 in two bank accounts, because if one bank collapses, you want to have a spare while you wait for the government to pay off the guarantee. Keep $50,000 ...


79

You should invest in that with the best possible outcome. Right now that is in yourself. Your greatest wealth building tool, at this point, is your future income. As such anything you can do to increase your earnings potential. For some that might mean getting an engineering degree, for others it might mean starting a small business. For some it is both ...


67

First, I would point you to this question: Oversimplify it for me: the correct order of investing With the $50k that you have inherited, you have enough money to pay off all your debt ($40k), purchase a functional used car ($5k), and get a great start on an emergency fund with the rest. There are many who would tell you to wait as long as possible to ...


66

There are people (well, companies) who make money doing roughly what you describe, but not exactly. They're called "market makers". Their value for X% is somewhere on the scale of 1% (that is to say: a scale at which almost everything is "volatile"), but they use leverage, shorting and hedging to complicate things to the point where it's nothing like a ...


60

Typical Human Advisor: Advantages: They can recommend funds and allocations that fit to your portfolio. Disadvantages: Those who are just fund salespeople in disguise will usually recommend poor-performing funds for higher commission pay. Their advice will not be much different from random person internet advice. When your portfolio drops, they still get ...


57

You need the services of a hard-nosed financial planner. A good one will defend your interests against the legions of creeps trying to separate you from your money. How can you tell whether such a person is working in your best interest? Here are some ways. Do they have an industry certification (like CFP, certified financial planner)? Ask who they have a ...


57

A Roth IRA is a great idea. You can only put in as much as you earn (as in, get in paychecks) each year, but that shouldn't be too much of a problem for you right now. You're paying nothing in taxes, or nearly nothing, so you'll have a great opportunity to get some squirreled away in a safe place! And since it's a Roth, you can always withdraw the ...


57

I can use that property to get a loan for another real estate? Or that's not how loans work? That's not how secured loans generally work. You could get a mortgage on your rental property, but the bank will most likely ask why you are getting a loan (to find out if it is because you are in financial distress). You might as well just buy the second property ...


53

All else being equal, No The interest on your debt is quite high and is probably not tax deductable. Any earnings on your investments would be taxed at about 30% based on your income. To positively gear these you would need a return of about 19.5%. The only investment I know that returns this is a roulette table but the risk profile is rather high. ...


53

Unlike others, I do NOT recommend putting your $6k into a retirement fund this early. It's a bad idea.1 If you're overflowing with money after college and don't know what to do with this $6,000 then, you can do the same thing then2 (edit: see below3)—this extra 4-5 years of interest or capital gains really isn't going make or break you, but the penalty and ...


51

If they return to their earlier prices Assuming I don't make too many poor choices That's your problem right there: you have no guarantee that stocks, will in fact return to their earlier prices rather than go down some more after the time you buy them. Your strategy only looks good and easy in hindsight when you know the exact point in time when ...


48

Your question indicates confusion regarding what an Individual Retirement Account (whether Roth or Traditional) is vs. the S&P 500, which is nothing but a list of stocks. IOW, it's perfectly reasonable to open a Roth IRA, put your $3000 in it, and then use that money to buy a mutual fund or ETF which tracks the S&P 500. In fact, it's ridiculously ...


47

You make $50/hr and are in debt? This is a serious problem! The $50K is a distraction. This is what I'd do: Pay off any high-interest debts (say 7% and above) up to ~$40k (saving some for taxes, ignore if they're already withheld). Stick remainder in a High Yield savings account (e.g. Ally) and forget about it. Discontinue use of credit cards, if you're ...


46

Any amount greater than 0 is fine really.* Investing great lump sums is akin to timing the market, just set a monthly target and stick to it.** Consistency over the long term is the key to success. This is a marathon, not a sprint. [*] just make sure you use a low fee broker(some even offer promotional 0 fees choices) and ETF investing (a mixture of bonds/...


43

Are there businesses which professionally invest ethically? Yes. The common term for this is "socially responsible investing". Looking at that page and googling that term should provide you with plenty of pointers to funds to investigate. Of course, the definitions of "ethical" and "socially responsible" vary from person to person and fund to fund. You'...


43

Until you get some financial education, you will be vulnerable to people wanting your money. Once you are educated, you will be able to live a tidy life off this-- which is exactly why this amount was awarded to you, rather than some other amount. They gave you enough money. This is not a lottery win. You will be flooded with bad people wanting your ...


39

401(k) up to matched amount High interest debt Emergency fund 401(k)/Roth 401(k) / IRA/Roth IRA Pay off student loans Pay off mortgage One can generalize on Traditional vs Roth flavors of accounts, I suggest Roth for 15% money and going pretax to avoid 25% tax. If the student loan is much over 4%, it may make sense to put it right after emergency fund. ...


37

They may well be concerned that, if the fund does not perform, they could be in trouble for mis-selling further down the line if you made a complaint. Following the financial crash, and various mis-selling scandals (PPI, packaged accounts, mis-described funds and hedging instruments to name a few), banks are under a lot of regulatory scrutiny and on the ...


32

You've really answered your own question, without even needing to go into the financial details. "I just don't like the idea of getting in debt and not being able to move any time soon." If you want to be able to move at short notice, home ownership is not for you. OTOH, if you plan to stay where you are, like gardening, auto mechanics, woodworking, or any ...


30

First, it's great that you're considering these options at all, and that you're trying to be responsible and forward-thinking about planning for your future. I'm also going to break with the consensus and point out 2 things: $6,000 is better than $0 or being in debt, but it's really not a lot of money. Depending where you live it's "2-4 months' living ...


29

You can make money via stocks in two primary ways: you sell your stock for more money then you paid for it. said stock you purchased pays out a dividend (only some do). Note that there's no guarantee of either. So it may very well not make you money.


25

You're not going to learn anything of significance by investing or trading with only $200 other than how to use the platform of your broker and you could easily do that by opening a FREE paper trading account with a broker. There are a slew of web sites that offer stock price forecasts. What makes you think that they are any good? If they could pick ...


24

This is a very good question! The biggest difference is that when you put money in a savings bank you are a lender that is protected by the government, and when you buy stocks you become an owner. As a lender, whether the bank makes or loses money on the loans it makes, they still maintain your balance and pay you interest, and your principal balance is ...


24

On Black Friday, 1929,the market fell from over 350 to just above 200. If you were following your plan then you would buy in at about 200. But look what the market did for two years after Black Friday. It went down to about 50. You would have lost around 75% of your capital.


24

I'm sorry to be the one to tell you, but you are quite wrong in thinking that your investment returns will "probably" be greater than how much you are paying on your debt. Only someone trying to sell you something would lead you to believe that a normal investment, on average, will earn that kind of return. There are periods where reasonable investments ...


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