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What to do with $1000USD

~Sushma~ — Tue, 15 Sep 2009 08:43:23 -0800

A charity gave me $1,000 USD they raised for me after a drunk driver wiped me and my motorcycle out. I am 56 yrs. old, sick from cancer and will be losing my job in December. I have little savings and will have to work at whatever my body lets me do, and probably lose my health insurance. I plan on selling my home and its contents and downsizing to a studio apartment. I have no credit card debt but hold two mortgages, both will be a wash at the sale. What is the best bang for my buck for this $1000 in this economy? A CD? Online savings account? Any suggestions?

Use cash to start a business or for a down payment on a home.

mintchip — Tue, 01 Sep 2009 18:40:50 -0800

Use cash to start a business or for a down payment on a home. I have been interested in having my own business. I have read business magazines for years and have even had a couple of small service-based businesses that I ran part time. No big bucks there but a rewarding experience.

Recently I've been considering trying to start a business for real. I have a small sum of cash (between 10-20k) I've been slowly saving for a home down payment.

It's a tough choice. Since I need a home to live in, buying one would mean an investment in my future and security. However, chances are that I won't get rich working for a private company. In fact, it's quite hard to get ahead nowadays with most of the good middle management positions gone. Meanwhile, most of the people I've known who did quite well for themselves did it by owning their own business.

I'm not saying it's easy. I'm just thinking that owning a business seems like my best shot at getting ahead, and it also happens to be a genuine interest of mine. At the same time, starting a business is a huge risk (I think it's something like 4 out of 5 fail within 5 years) and I could lose the money as well as a lot of time and energy.

I believe I have many of the qualities that would contribute to success in business. But it's hard for me to know if I have all of them.

What's your take? How have those of you who have been in a similar position weighed the pros and cons of such a decision.

$20k Loan on $79k Home?

rougy — Mon, 17 Aug 2009 17:19:48 -0800

House loan advice needed. Should I take out a loan against my house while I'm trying to sell it? I need some help from some people familiar with numbers and money.

I'm between a rock and a hard place. The only good thing I have is my house, which is completely paid for, and recently appraised at $79k.

It's for sale, and I think it will sell within the next three to six months—twelve months tops—but I'll need some resources to keep me alive during that time.

I'm thinking of taking out a short-term, two-year loan for $20k and living on the money and using that money to pay back the loan until the house sells, but I'm not a money person and I don't know if that's a wise move to make.

I could really use some good advice. Thanks.

I'm having a financial existentialist crisis

MrMulan — Wed, 11 Feb 2009 09:36:19 -0800

Have I been wrong on my financial core beliefs? I have had a worldview when comes to finances for over 15 years that I am now questioning.

1. I believed 8-12% return on your money over the long term was reasonable, conservative, and realistic.
2. I believed in No-load mutual funds.
3. I believed in dollar cost averaging.
4. I believed Technical Analysis does not work.
5. I believed in A Random Walk Down Wall Street.

First there was this segment from NPR(of all places!) that blew my mind: Technical Analysis actually works (at least for oil)
Then this article from Slate on Suzy Orman. The article disses No-load, and Dollar-Cost Averaging without any references.

Was NPR sinking to a major network level of reporting? Or does TA really work?
What is the mounting evidence against No-loads as part of a passive, long term strategy?

There is no other choice for me but to be an optimist for the long term health and prosperity of our country and by proxy, the stock market. Else, the best thing to do would be to stock up and canned food and guns, and that really isn't a nice way for me to live.
Why then is Dollar-cost averaging bad, if you are doing it in mutual funds, and doing it for the long term?

There are many books out know calling into question A Random Walk Down Wall Street. Is there any truth to them?

Questions about the possible economic depression

mintchip — Tue, 16 Sep 2008 21:06:01 -0800

Questions about the best course of action to prepare for a possible economic depression I'm no economist, but I'm trying to learn about the possible economic depression everyone's been talking about since the recent financial upheaval. I have a number of questions.

1. I have always read that there are huge bargains to be had when the stock market tanks. If this is so, what stops investors from jumping INTO the market when there is a huge crash? For example, why not invest in an index fund as soon as the market drops off 500 points? Why *wouldn't* this be a good idea for the individual investor (assuming it isn't).

2. What would happen to people's outstanding debt if the companies they owe $ to went under? For example, did people's debts get wiped out with the banks that closed up shop during the Great Depression? What about nowadays...for example, what would happen to student loan debt if virtually nobody could afford to make payments?

3. Let's say you've got some extra cash flow right now...what's would be the best bet when preparing for a possible period of economic depression? Pay off outstanding debts? Stockpile money in order to buy up things once they've lost value? Etc.

4. How were some people able to purchase "bargains" during the great depression if indeed inflation caused money to lose most of its value?

5. Does FDIC insurance REALLY ensure that money is safe and accessible (up to the limits specified)?

6. Anyone care to venture a guess about what the next few years are going to look like economically?

How to spend 25k to reduce debt and increase freedom!

crewshell — Fri, 13 Jun 2008 14:11:09 -0800

A man has debt, he comes into a little bit of money... how best should he spend it? A man has debt.
6k in student loans (5%)
19750k in credit card debt (ranging from 8-10 % interest)
15500k car loan (car is worth 12k)

Man gets 25k at 2% interest.
Man thinks he could get away with no car for 6 months, saving him 600 a month.

Should man pay off credit cards & student loans and continue to drive his car

or

Should man pay some student loans, sell car (take the lose) and pay off credit cards?

What makes the most financial sense. Ultimately regained financial freedom and the ability to go back to school is the goal. Though eventually another car will be needed.

P.S Current car is a gas hog. 18 MPG

Personal Finance

locoindio — Wed, 21 May 2008 09:37:59 -0800

whats a good personal finance magazine to subscribe to? i know of kiplinger's. i don't know how good it is, though. what are some other magazines for personal finance?

How do I get out of debt and get my writing back on track?

Anonymous — Sun, 02 Mar 2008 13:27:28 -0800

I just moved 4,000 miles to Washington, DC and took a job with far less salary than I am worth in a new industry for the fringe benefits. I have about $18,000 in CC debt and have a modicum of a plan but need real financial help to sort out how to pay off this debt while in the meantime making something in the mid-30's. Obviously, I should be doing a lot more than working my regular 9-5. I am an accomplished journalist, but I have literally never had to freelance. Now, I am sort of between things and realize I have nothing in the way of a signpost that advertises my work - and no portfolio to speak of. How does a person build a portfolio again from squat?

Is it worth it to start a blog and see what I come up with money wise?

Where do I get financial help? I'm not swimming in debt, but I have dreams where I watch my life sliding out from under me and I am tired of living a life I don't really have on income that's not really that. All of my purchases have been really lame, like eating out. I don't own a car or house or anything.

What financial responsibility resources are there for a young person with a job but nothing in the way of intermediate assets? (that won't come in the form of a book I've already gotten for Christmas, read, and still haven't figured out how to use.)

Personal Finance with Pounds

Happy Dave — Fri, 15 Feb 2008 10:01:17 -0800

"Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." British personal finance blogs, forums and other resources? After several post-university years of lurching from one personal finance crisis to another, I'm finally pulling clear of my personal debt.

I've had a very decent increase in job income, and I'm also about to receive a legacy which will let me pay off my post-universtity loans, and, for the first time in my adult life, leave me in a position to start saving properly, investing fully in retirement funds and give me a stable enough life to create and follow a budget that isn't going to get dashed to pieces on my bank's indifference and yet another overdraft charge.

Since I started working towards fixing my personal finances, I've been following a few personal finance blogs in the US (Get Rich Slowly, The Simple Dollar etc). While these are very useful, and some of the principles are currency independent, they are very US-focused.

I'd like recommendations for personal finance blogs, forums and other online resources that talk about the specifics of the UK financial world, from ISAs to investing to bricks and mortar. My key aims in the next few years are to pay off £12k in student loans as fast as possible, save 6 months of expenses, a deposit for a house and get my retirement funding in order - which websites will help me do this?

Personal Finance Filter

gogomickey — Wed, 24 Oct 2007 08:05:56 -0800

Does anyone know of a good financial advisor in the Northern VA/DC area?

Convince my wife not to quit her job

Anonymous — Tue, 08 May 2007 17:27:54 -0800

How can I convince my wife that we need her income and that as much as we'd like to have our son at home with her instead of in Day Care, we have to face reality or severely cut back our lifestyle. We're better off than most families. We were lucky in our real estate deals; selling one home on the west coast at the top of that market; but then we bought our new home at the market peak in our current town. Due to the cost of living differences, we still came out ahead in that deal.

We currently have no credit card debt (we converted it into a 8.5% interest equity loan) and no car payments. We have a 30yr 6.25% mortgage that is approximately 50% of the value of the house. My wife and I have lived in the house for a year but spent the first 2 months of ownership doing upgrades and repairs. At some point we lost track of our spending and what was to be $10K-15K in improvements became $30K+ then add in some medical bills and we were suddenly looking at $40K in credit card debt with payments beginning to balloon out of control.

The wisest thing we did was to convert that CC debt into the Home Equity Loan. We now have essentially mortgaged 66% of our home and can afford to make the monthly payments with no problem. But our credit rating dropped a bit due to a few late bills. Further financing is not an option for the next 5-7 years. I think the next step is to set a budget and find savings that don't compromise our lifestyle too much. The reason we moved to our current location is so we could live the lifestyle we want.

We're a two-income family with one child. We've been married 4 years but never had a budget. This month marks the first time when we're actually living within our means. However, my wife wants to go part time when our son enters Pre-Kindergarten in a few months. That will put a strain on our finances as not only will we lose half her income, but we'll also lose her health insurance. This while I am struggling, with some success, building my hobby (a blog) into a second job with enough extra income to pay down our home equity debt and build up some savings. I'm hoping it's not unreasonable to ask my wife to continue working full time, even if it means our son will be in day care longer than we would both like.

All Hail the Union

pomegranate — Fri, 08 Sep 2006 07:55:40 -0800

How do you find and pick the right credit union? I'm finally moving past the bank my parents picked for me 25 years ago, and generally taking more responsibility for smart personal finances. I'd like to move all of my partner and my accounts to a credit union, but I don't know how to pick which one. My partner works for a university now but soon won't, and my company doesn't offer any particular memberships. All the credit unions I see online seem local and really small, is that a problem? Would I get worse rates and benefits if I went with a larger one like Smart Financial? If you use a credit union, how's it going for you?

How to explain away a bankruptcy in my distant past?

AdInfinitum — Mon, 24 Apr 2006 05:25:12 -0800

I need help generating an 'explanation' for my bankruptcy 6 and 1/2 years ago that will not make me look financially incapable to a potential investor. Are there any 'good' explanations for filing bankruptcy that I could use in order to not have this fact work against me? I need potential circumstances that would warrant a bankruptcy and sound reasonable to a potential business partner. More inside... I filed bankruptcy 6 and 1/2 years ago as a financial move to alleviate large accumulated credit card bills that were too much of a burden to handle. It was a LONG time ago, and since I've been very financially capable and have saved over $50,000 while working for the company I've propelled into success. I'm not at all the same person I was when this occurred, but my credit is still marred from that era.

Anyway, I have a complex situation approaching where a 'venture capitalist" friend of mine (who's actually my landlord) may be considering investing in a new company that I would run. Part of the arrangement would include a 'creative' financial deal in order to allow me to purchase the house I'm currently renting from him (the 'venture capital' guy). This would definitely prompt my prior bankruptcy to come to the surface.

Does anyone have any 'good' potentail explanations/excuses for my filing of bankruptcy that would sound better then 'I wasted alot of money, ended up cornered and bankruptcy was the best option'? I need to remain impressive on all levels, and don't want this horrid mark on my credit to hamper my negotiations. I need possible 'reasons' for bankruptcy that sound reasonable and not incriminating. Any suggestions?

Personal finance web sites?

jdroth — Tue, 14 Mar 2006 09:00:15 -0800

Please recommend some good personal-finance related web sites. I'm looking for sites with good information on all aspects of personal finance and responsible money use. Most of what I've found is focused on investing, though, and on macroeconomics. I'm not interested in the Big Picture. I want sites that focus on the Small Pictures: dealing with debt, saving for the future, finding bargains, etc. Think Your Money or Your Life, but in web form. Big sites, little sites, weblogs, print magazines — I don't care, so long as it's focused on personal finance. Bonus points for sites with RSS feeds. This is all in preparation to constructing a personal-finance web site of my own, one built around sensible attitudes toward money. As a secondary question, I'd love to know what sort of content people would like to see from a personal finance site. Financial calculators? Book reviews? Hints and tips on saving money? What would make a personal finance site useful to you?

Personal Finance 101

junkbox — Wed, 19 Oct 2005 12:19:15 -0800

Young married couple, mid-20's, good income: ready to take our finances more seriously. Who do we talk to? My husband and I are not particularly good with money. We earn it, we spend it, and as long as we've got a little in the bank we feel all right about it. This has worked okay for the last few years, but it's not particularly sound fiscal policy.

Together, we realize that we need to learn how to handle our finances more adeptly. How to budget, how to save, how to clean up our somewhat checkered credit history, and how to afford a house without mortgaging ourselves up to our eyeballs. We have a good income -- enough that we're paying down our debt, keeping up with our bills and increasing our savings a little -- but we're not as responsible with money as we should be. We have this sense that if we managed our money better, we could do a lot more with our income.

We're looking for general financial counseling: someone to help us set goals, show us new habits, and teach us about the wide world of personal finance, without giving us a hard sell on investment plans or mortgage rates. Where's the best place to get this kind of help?

How long are you supposed to keep bank statements, tax returns, etc. on file?

luneray — Sun, 20 Mar 2005 13:18:57 -0800

I'm trying to organize all that paperwork that's piling up in my home, but I'm also trying to simplify my life and reduce clutter. Here's a list of stuff that I think I should be keeping on file: tax returns, work related investments (e.g. 401(k)), car insurance statements, student loan paperwork, credit statements from closed (paid off) accounts, monthly bank statements.

I don't currently keep copies of utility/phone bills.

A friend says keep for everything for seven years. I agree with keeping current records of open accounts (like student loans), but keeping seven years worth of telephone and electric bills seems a bit extreme. What about loans that have a 7+ year repayment--do I just keep the most recent seven years or do I keep everything for seven years AFTER the loan is paid off?

Is there anything else I should be keeping?

How long do I need to keep household paperwork (ie bills, pay stubs, W-2s, etc.)?

keswick — Mon, 18 Oct 2004 19:09:51 -0800

How long do I need to keep household paperwork (ie bills, pay stubs, W-2s, etc, etc, etc.)?