Where to Invest

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DDVX
Posts: 12
Joined: Mon Jun 20, 2011 9:16 am
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Where to Invest

Postby DDVX » Sat Dec 15, 2012 11:08 pm

Hey guys,
I've posted a few times here before and always appreciated the help. I'd definitely appreciate a little more here.

I am starting full time this January and so I'm trying to get my finances in order. Number crunch:

Salary: $98k
Rent: $900 a month
Car Note: $450 a month
Food/Entertainment: $300 a month
Besides the car, I have no other debt, and I'm currently single.

This leaves a lot of money left over. With my company, they offer 401k matching but only after 3 years on board. This leaves me with a couple questions.

Two things I know off the bat that I'll be doing is maxing out a Roth IRA and setting up an emergency fund. I want to invest the rest of my money as efficiently as possible. Do I put money into the 401k even without the employer matching? Or do I invest somewhere else? Also, even if I do add some to the 401k, do I look at a separate Vanguard total stock market index account as well? Or with that much cash do I look into other investing markets (real estate or something?).

I'm moving to a much bigger city, so prices I'm sure will be a bit higher than I have been used to the rest of my life. I know I'll also have many other expences such as insurance, cell phone bill, etc, but I was just looking for more broad advice. Thanks as always guys.

troyce1
Posts: 5
Joined: Mon Dec 05, 2011 8:44 pm
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Re: Where to Invest

Postby troyce1 » Tue Mar 12, 2013 9:50 pm

Why not hold off on maxing out the ROTH and put all that money towards the car and pay it off completely.

This would also have a slight affect on your insurance if you did not have a car loan too I assume.

You would realize an immediate gain/savings from not paying as much interest on the car note, then once paid off you could beef up your IRA by that much more or invest in other equities etc.

scout
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Joined: Thu Mar 14, 2013 8:30 pm
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Re: Where to Invest

Postby scout » Thu Mar 14, 2013 8:52 pm

Paying off the car early won't change your insurance UNLESS you change your coverage. The terms of a car loan typically required you to have comp/collision coverage (full coverage), one the loan is paid off, you aren't required to keep it unless you want to - if you remove be ready to pay out of pocket for theft, weather damage, crashes etc.

Paying off the car early wouldn't be a bad idea (check to see how much interest you would save). It sounds like you have quite a bit of extra cash....maybe buying a property?

An IRA might be something to consider, or contributing to your 401k even though your employer won't match for a while.

Hope this helps :)

stannius
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Joined: Fri Sep 12, 2008 12:29 pm
Location: Seattle, WA
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Re: Where to Invest

Postby stannius » Fri Mar 15, 2013 9:05 am

scout wrote:Paying off the car early won't change your insurance UNLESS you change your coverage. The terms of a car loan typically required you to have comp/collision coverage (full coverage), one the loan is paid off, you aren't required to keep it unless you want to - if you remove be ready to pay out of pocket for theft, weather damage, crashes etc.


It would if the OP has gap insurance. Though I assume most people wouldn't put that under the "insurance" expense category but rather the "car note" category. I further assume the OP is doing just that, given that he or she makes the classic mistake of thinking of the car loan as a monthly expense, rather than as a debt with a balance and interest rate.


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