doing good paying off bills, what a good investment?

[ezbtr]

Just a little a month, I'd like to see what i can invest in, more towards retirement. I'm 44, job is good, paying off old bills(never use credit cards anymore - divorce hurt me) didnt do a BK, owe about 25K in old bills, just got my 2nd review - was a good one. Love my job, bennies great, kids all good. And I'd like to buy a small 3 bdrm, 2 ba. house soon, but thinking pay off old bills first. House prices dropping like crazy in N. CA.
Any ideas guys?
Oh btw, to cut costs, I've got rid of personal cell phone($30 a month), working on lowering interest with creditors, try to take lunch to work a lot, got an 87 Camry thagt gets 27-30 mpg for $900, leave 99 Yukon at home(still making payments) and it has 110K, use free fireplace to heat apartment, PG&E 28-$31 a month, almost always cook at home, occasional pizza/burgers out, and have IRA at work and work pays my $25 a month internet.

 

[lowkee]

Re: doing good paying off bills, what a good investment?

The best investment for anyone with debt is to get out of debt as fast as possible. No reason to invest for 4,6, maybe 10% annual returns when you pay 12, 18 or 20% interest on your debts.

Good work on removing waste from your lifestyle. Bringing lunch to work saves a ton. Have you cancelled your cable television yet (if you have it)? If your Toyota will last you, consider dumping the Yukon even at a loss. Adding in registration, insurance, maintenance and interest on the loan, it is entirely possible selling at a loss is a better 'investment' than keeping it until it is paid off.

Keep up the good work!

 

[arks]

Re: doing good paying off bills, what a good investment?

#1- Pay down that $25K.
#2- Another IRA- maybe as a short-term CD.
#3- If you don't use the Yukon, sell it to eliminiate that debt.

Of course, ME giving investment advice is similar to a fox watching the henhouse.

 

[Mark42]

Re: doing good paying off bills, what a good investment?

If you are saving the money to buy the house, then 6 mo to 1 yr CD's are a safe place to park the money. 6 mo = 2%, 1 yr = 2.4%. Thats a lot better than what you are getting on a savings accnt.

The stock market is not the place to put money you will need in a year or two. It is gambling, and you will need a sure thing.

Another option is to see if there are employeer stock purchase plans, they usually guarantee a certian % gain on the investment, or you money and interest back.

 

[mthieme]

Re: doing good paying off bills, what a good investment?

Personally, I have been investing in guns (antiques) and tangibles (silver) lately.
Stocks are all but shot (just got a letter - my best one just filed for Chapter 11). CD rates rot. Can't afford to buy land and sit on it until the market turns around.

 

[jay_merrill]

Re: doing good paying off bills, what a good investment?

If your goals are long term, investing in the market right now may not be all that crazy. Some people feel that the market has reached "capitulation point," and while it may bounce around for awhile, it may not go much lower (if any) than the bottom we've already seen. While it is sort of a bummer to have watched an already existing portfolio get slammed, buying at current levels could bring a decent return over a 6 to 10 year period.

The trick to doing this well, however, is to have a very good investment advisor, who will put you in the right stocks, mutual funds, etc. You also have to be willing to take risk, because in the market, nothing is a sure bet.

 

[mthieme]

Re: doing good paying off bills, what a good investment?

I agree - somewhat. It's certainly a good time to buy stocks and you should diversify your monies.
It seems like you just don't know who's going to go belly up tomorrow though.

The biggest problem with a financial advisor is that he/she is most likely a broker. They are going to sell you stocks that they have to sell and make commission on. If you manage to find a good one, they are certainly worth their weight in platinum.

 

[SS MAYFLOAT]

Re: doing good paying off bills, what a good investment?

Four years ago, my wife and I was in some serious credit card debt. It was easy to see that without refinancing our home (again) that there would be no way to get out of the mess. We contacted the Consumer Credit Counseling Organization to set up a plan to get us out of the mess with leaving us with a great credit score. The only drawback is that while on this plan, you cannot apply for any credit/loans. This itself can be bad if you depend on credit. We finally got over the hump and have been able to save some money from a pay off on one of our vehicle payments. We put that money aside for those rainy day emergencies.

Our future plans after our debt is paid off is to use CASH as much as possible. We will keep a larger savings for big ticket items. Our goal is to be patient and forget the "Got to have it now" attitude. It was too easy to sit at the computer clicking and buying stuff for our kids, cars, house, and boat. It seems that as the internet became more popular, credit cards seem to be easier to get. Its just a shame that the lending institutions supplying the cards didn't do a proper credit check on those that shouldn't have had them in the first place. I was one of those, but I stand by my word that I pay back what I owe. Just 8 more months til our cards will be paid off

 

[JB]

Re: doing good paying off bills, what a good investment?

If your employer matches 401K contributions that is very hard to beat, even with the volatile market. You can direct the funds to ultra-conservative or equities and once a year you can redistribute them.

I personally believe that the DOW wont drop below 8K for more than a day or two and that when the recovery begins it will move up to around 10K and settle there for a while until real growth resumes. The point is that a 401K is a great long-term investment because it gets $2 for every $1 you put in.

I still think real estate is the best long-term investment for unmatched funds. Raw land more than residential.

For short term investment or liquidity the essential first step is positive net worth, then becoming debt free. CDs and short term bonds are good, but not immediately available for emergencies.

Staying free of debt needs immediately available funds to deal with the surprise expenses that could get you back in debt. Keep some in an interest bearing account to pay cash for that surprise need to replace a major appliance or fix the roof. Use it only for emergencies.

 

[redfury]

Re: doing good paying off bills, what a good investment?

The best investment for your money is to put it in mason jars and bury them in the back yard.

On a more serious note, Gov't savings bonds and gov't debt are ways to invest, but the best thing to do is to get yourself to a point where day to day living is cheap, you can sock some money away and keep yourself out of as much debt as possible.

I did the debt consoling thing, and it worked out great. I don't have any kind of credit card...just the bank card. I'm working to refinance the house at a lower interest rate and save 200/mo. off the house.

Things aren't going to be getting any better in the near future economically, so the best thing you can do is protect yourself for down the road. Give yourself an emergency stash, don't keep all your eggs in one basket.

 

[Shizzy]

Re: doing good paying off bills, what a good investment?

Pay the debt off. if you are looking at buying a house soon they are going to be looking at your debt to income ratio as well. then worry about stashing your money or making money off your money.

 

[jonesg]

Re: doing good paying off bills, what a good investment?

A very good finance guy told me yrs ago if your card debt is close to your yrly net income you can probably never pay it off, actually you're broke and bankrupcy is next.
I haven't used or owned a credit card in over 5 yrs.

 

[kenmyfam]

Re: doing good paying off bills, what a good investment?

Best investment is to get rid of debt that bears interest. Start with the high interest and work down. When the debt is all gone start to save then. Depending when that is will depend where to invest it.

 

[Adjuster]

Re: doing good paying off bills, what a good investment?

All experts say pay off debt. Revolving debt first(credit cards).

 

[Kiwi Phil]

Re: doing good paying off bills, what a good investment?

I don't understand 401, CD etc.....but that's not an issue concerning my pricipals in surviving well.

My advice is
1. get rid of debt
2. buy your own home and freehold it are quickly as possible.

by following these 2 points, you may well be the wealthiest man in your street.

Then start looking at different forms of investment.

Cheers
Phillip

 

[ezbtr]

Re: doing good paying off bills, what a good investment?

Thanks guys! Im a fairly level headed guy, and know I should payoff all starting with highest % first, which I am, divorce really screws you = pay off as much as I can. trying to make deals with creditors too, yet I alwyas want to save for a bad situation. Some great comments guys! Thanks!