(Untitled)

[darth_cabal]

Poll What

Comments

[thistlerose]

I'd use it (most of it, unfortunately) to pay off my credit card and car debts. That way, I could actually start saving some of my income, such as it is at present.

[darth_cabal]

Smart. Actually, I've seen some articles recently about retailers being concerned because people were canceling their credit cards and paying for things in cash. Apparently when people have to fork over physical dollars and can see their wallet emptying out, they tend not to buy as much.

It was more of a hypothetical question, though--$10,000 in addition to the amount you would need to pay off debts and set aside a buffer fund to see you through for a while in case of downsizing or a sudden need for expensive car repairs or something.

[ex_kisa_haw]

Oh, I might have answered differently then.

I didn't realize I might need liquidity.

Even so - I don't really know what I'd do as I've never actually had money beyond paying bills and feeding myself, so should I come into a bunch of money (post-paying off debts), I would probably do some research before investing.

HI, THIS IS A FINANCE LESSON COURTESY OF MY FATHER'S DINNER TABLE CONVERSATION WHEN I WAS A CHILD

[darth_cabal]

Yeah, in general you want enough money in highly liquid assets (like gov bonds) to live off of for a year or two, just in case the economy slows/you lose your job and take a few months to find another one/you encounter unexpected expenses. Once you've accumulated that much, you start investing additional savings in things with a higher yield, like stocks. The magic of compounding interest is that a mutual fund with a moderate degree of risk/benefit can double every 8 years or so--makes it a lot easier to retire

Re: HI, THIS IS A FINANCE LESSON COURTESY OF MY FATHER'S DINNER TABLE CONVERSATION WHEN I WAS A CHIL

[ex_kisa_haw]

Thank you! I sort of knew some of that, at least I'd heard it before, but this caught my attention: highly liquid assets (like gov bonds) was utterly new to me. In my family (and granted they are very very old), bonds were a long time investment that you couldn't do anything with for years and years.

And I should know better than to believe that, when I know absolutely that my dad was THE WORST person ever at investing/saving. He did an abysmal job. Luckily, between his time in the service and his disability (and saying 'luckily' about that makes my soul hurt), my mom is living okay after his death, but how nice would it have been for her to have a cushion beyond government support. :(

Re: HI, THIS IS A FINANCE LESSON COURTESY OF MY FATHER'S DINNER TABLE CONVERSATION WHEN I WAS A CHIL

[darth_cabal]

Well, I should add a caveat that there are a lot of different types of bonds (Government bonds; municipal bonds; corporate bonds; short term, long term, and perpetual bonds; junk bonds; marketable and non-marketable; registered and non-registered; etc), and some of them are more liquid than others. The easiest way to resolve the liquidity issue is to buy into a mutual fund consisting of bonds rather than buying the bonds themselves--you'll get the income and the fund managers will have to worry about timing! The sticking point is more that they are more secure, so you don't have to worry about selling at a loss the way you do with stocks

[thistlerose]

Oh, well in that case... I don't suppose it's enough to bribe Canadians to let me into their country, should the election go very badly. :P

I don't know. Never having had any money to invest, I never really paid attention to things like stock options.

[darth_cabal]

LOL That sounds like a wise investment to me! :D

(I find options trading terrifying, tbh. That's a quick way to lose your shirt.)