People of OT, hear my cry...

[protegeV]

Hmm, i think this is my first real post in OT(wonder why (lol2))

Anyways, I guess you could say Im looking for a bit of advice...
Im going to be coming into bit of money(large for me, maybe not so large to some older people) in a month or two from an accident I had last year where my car was totalled and I was mildly injured. To give you an idea it should be in the ballpark of $6-7,000
I've thought of a few things such as...Just putting it away and saving, investing(into what i have NO idea), or getting into some kind of business venture where I can physically work to make the money work for me and grow.(again I have no idea what to do)

And then I always have that little guy on my other shoulder saying **** it and buy a Hiboost kit(laugh)

thoughts?

 

[jersey_emt]

Are you in college or are you done with school?

 

[protegeV]

haha, out of school I wish...Im 18 and I've only completed 11 viable college credits.(I spent all last year at a Bible College&Seminary which doesnt do jack for getting a real degree)

school never crossed my mind much since I can get a good amount of financial aid this year, I still have three more semesters I will probably go to community college, and I am able to pay for that from my current job.

 

[dominoy2k1]

i say save it. maybe spend a little but i would save as much as possible. you never know what will happen, like losing your job or needing to fix your car. or just some random BS. is your car paid in full?

 

[protegeV]

no, my car isnt paid off either. I doubt I will lose my job though, no reason to. Its not a corporate, high risk job or anything. I just work at a restaurant and make pretty good money.

I was planing on putting at least $1K towards the principal on the car though, unless there was a way I could use it more efficiently(like making more with it than I would lose on interest of the loan)

 

[BacDoc]

The same thing happened to me in '99. I paid off some small bills I had and I bought a new computer (nothing expensive) and saved the rest (about $5000).

 

[Sir Nuke]

Save it....use it for school.....

 

[girth]

You're not sure what to do so this is a no-brainer.....you shall put the money into some sort of savings.

 

[Da 6]

if you have a simple loan on the car put a lil twards it and put the rest in savings...or buy alot of savings bonds and put them in the bank valt (2thumbs)

 

[luckezero]

option 1: if you put some of the money into a IRA (I think between $3-4k is the max allowed per year), it is a great way to start on your retirement and might help you get a bigger tax refund for the year that you invest the money. the benefit here is compound interest. The earlier you start, the more you'll have. And depending on how you set it up, you can withdrawl money from that account without penalty if you use it for school or buying your first home later down the road. Also, depending on what rate your car is financed at, paying down more of the principle will help you save money. Maybe just $20/mo. less in interest charges, but that's better than you'd get in a savings account and carries no risk.

option 2: Place some money in the stock market. go with something you're familiar with and has a good rating. the rule here is to never invest something you couldn't live without. As always, the riskier the investment, the higher the return and the steeper the loss.

I'm all for spending some of the money on something you want or need. If you're on your own and don't have any nice furniture, maybe a nice EZ Boy chair or couch would just make life so much nicer. I know when I was in college I wasted a lot of money on cars and motorcycles. How much smarter I would have been if I had bought a nice bed, a nice couch, a nice TV, and nice dishes. To me, it's the things you have to sit on, touch, and look at day in and day out that make "home" feel so much a better place to be. And if you haven't moved out yet or have to stay in dorms, save the money for that day when you do move out. And be careful which furniture stores you walk into... some of them are brutally expensive and others, well, just moderately

P.S. I say this with my own opinions, but I think that if you blew several thousand on a turbo kit or some mods for your car, you'd only resent it down the road. Next to cars, I think that only modifcations depreciate faster!

 

[Greg S]

Luckezero is dead right with what to do. This year the limit for an IRA is $4000, so put that amount away in to it right now. It may seem silly at the moment but in 10 years of compounded interest you'll be loving it when you have $10-15,000 doloars in your account and have a real job that is putting more money away in to a 401K at the same time.

 

[protegeV]

hmm, that sounds like a plan. I never even knew what an IRA was(dunno)

 

[sam1]

im with luckezero as well, but if youve got 7k, then id suggest doing both options. put maybe 3k into an ira, then another 2k into a mutual fund, and youd still have 2k to play with. so that way, youd have a good investment started that will make you even more money down the road. plus youd still have enough to play with, maybe even enough for a turbo kit=).