topic Re: What would you do with 20k? in SmorgasBoard

What would you do with 20k?

unc0mm0n1 — Tue, 26 Mar 2013 16:22:59 GMT

Hi everyone longtime lurker first time poster. First, I want to thank you guys for all the information you have given me over the past 10 months it has been really helpful. Now I have new situation and maybe you guys can help. I'm a veteran (6yrs Army) who now attends a top3 law school. I just turned 30 recently got married and go to school on the GI bill. I own my car and the only debt I have is 8k in school loans. I have about 3k in the bank. Anyway I'll be taking a job this summer where they'll pay me 3600usd/week by the end of the summer I figure I'll still have about 20k of that money. I'm not sure what to do with it. Should I pay off my loans even though I don't have to for another year (I have one more year of school left) or invest the money. I've already maxed out me and my wife's IRA for the year. I really want to build up my credit as I was a little reckless in my younger days my credit score is hovering around 690. Should I buy some real estate? I know some guys who invest in foreclosed real estate but I'm not sure if that is a great market? Invest in stocks? Maybe an index fund? Any help would be appreciated.

Re: What would you do with 20k?

E150GT — Wed, 27 Mar 2013 01:15:34 GMT

real estate... Do it right though

Re: What would you do with 20k?

HiLine — Wed, 27 Mar 2013 01:40:22 GMT

I would invest the money. Where to invest depends on your time horizon. When do you see yourself needing the cash? The most profitable investment right now would be a stock investment, and for that you can either invest in an index fund or pick stocks on your own. How knowledgeable about the stock market are you?

Re: What would you do with 20k?

unc0mm0n1 — Wed, 27 Mar 2013 03:06:17 GMT

Thanks for the reply guys. I don't think I would need the money ever (meaning until retirement). Me and my wife live comfortably now off her teachers salary and my GI Bill payments. Next year after I pass the bar I'll start working full time and will be getting paid in the low 200's so I have no doubt I'll be able to invest more then or pay my school debt down. I only plan on working for a big firm for a couple of years and then hopefully get a job with a govvernment agency (which will mean a huge pay cut). So it's important that by that time I have both my credit and investments in order. The reason I was leaning toward real estate is that it will positively affect my credit. Also as an aside my wife is new US resident who doesn't have a credit score yet. We opened her both a secured (visa) and an unsecured (AMEX) credit card through usaa both with a thousand dollar limit last month. How long before she gets a credit score?

Re: What would you do with 20k?

mirachi — Wed, 27 Mar 2013 03:14:14 GMT

Personally, I would pay off the student loan first and then use the remaining 12K to either invest in stocks or put into CDs (saw someone posting about putting money in CDs every 2 weeks and letting it mature).

Re: What would you do with 20k?

unc0mm0n1 — Wed, 27 Mar 2013 03:22:48 GMT

Thanks I figured I should pay off the loans, it was a little shocking everyone said I should invest all of it first.

Re: What would you do with 20k?

HiLine — Wed, 27 Mar 2013 03:45:47 GMT

The reason is that a stock investment is likely to earn you a much higher rate of return than the interest rate on the student loan. If you have a certain degree of tolerance for risk, investment will make sense in the long run. On the other hand, some people can't sleep well knowing that they have debt to repay and would much rather relieve themselves of any financial liabilities. If you indeed do not foresee any necessity for that amount of money and don't have to pay off the loans immediately, then do what someone without debt would: invest the money.

Re: What would you do with 20k?

starry1 — Wed, 27 Mar 2013 04:00:16 GMT

It takes six months to generate a credit score. I personally would pay off the loans and invest the rest because I'd rather earn interest than pay interest.

Re: What would you do with 20k?

unc0mm0n1 — Wed, 27 Mar 2013 22:19:50 GMT

The loans don't have any interest. well at least until i graduate and I pass my grace period. I actually think it would be smart to invest. I mean if I wait a year technically i'll owe less (because of inflation) plus even if I just put the money in a CD it'll still be worth more than if I just paid off the loan.

Re: What would you do with 20k?

HiLine — Thu, 28 Mar 2013 16:21:30 GMT

@unc0mm0n1 wrote:
The loans don't have any interest. well at least until i graduate and I pass my grace period. I actually think it would be smart to invest. I mean if I wait a year technically i'll owe less (because of inflation) plus even if I just put the money in a CD it'll still be worth more than if I just paid off the loan.

Exactly.

Keep in mind that most CD's won't beat inflation for you though.

Re: What would you do with 20k?

Open123 — Sat, 30 Mar 2013 14:13:37 GMT

I'd buy a basket of ETFs in TIPs, certain precious materials and metals and currencies that would appreciate the most with US dollar devaluation. Really speculative, hedge with a short on soverign debt instruments.

Re: What would you do with 20k?

E150GT — Mon, 01 Apr 2013 03:08:29 GMT

Guess I am the lone guy here with the real estate. I wont invest in stock market.

Re: What would you do with 20k?

Anonymous — Mon, 01 Apr 2013 12:36:37 GMT

I would buy yourself a little fixer upper for 15,000 put a little work into it, just enough to get it rent ready and make a monthly income.

This is what my husband and I have started to do. We just bought a house for $6000, yes $6000 is correct, redid the floors in some cheap plain tile, painted the walls, put in a few hi quality window units that have heat and air becuase the Hvac was missing. Total 10,000 and rent it out for 650 a month.

So by the time current renter moves out house will be paid off and can replace hvac and rent for $850.

Not to mention that cheap houses gain the most value with little work plus you get a monthly income. Rent for less than market value= rented quick so it never sits empty.

Re: What would you do with 20k?

HiLine — Wed, 03 Apr 2013 01:05:44 GMT

@Anonymous wrote:
I would buy yourself a little fixer upper for 15,000 put a little work into it, just enough to get it rent ready and make a monthly income.
This is what my husband and I have started to do. We just bought a house for $6000, yes $6000 is correct, redid the floors in some cheap plain tile, painted the walls, put in a few hi quality window units that have heat and air becuase the Hvac was missing. Total 10,000 and rent it out for 650 a month.

So by the time current renter moves out house will be paid off and can replace hvac and rent for $850.
Not to mention that cheap houses gain the most value with little work plus you get a monthly income. Rent for less than market value= rented quick so it never sits empty.

If you can actually pull off a deal like that, there's no better alternative!

Re: What would you do with 20k?

Anonymous — Sun, 07 Apr 2013 00:22:12 GMT

I'm a big believer in owning land. Jump on the veterans land board site and see if there is any in either a) an area that you know is expanding soon or b) that is in prime hunting territory. My hub is an army vet (2 years til retirement) and once our personal finances are top notch, we plan on getting some acreage here in TX that we will lease as hunting property until our boys are out of school and we can move there. The lease money can cover taxes and part of the payments. BUT, that's just our little dream. I would also go ahead and clear up any debt I could to free up "future" money.

Re: What would you do with 20k?

rebuildingmission2013 — Sat, 20 Apr 2013 17:48:26 GMT

Buy Bitcoin whenever it hovers around $50 range and sell above $125.

Instant Profits...

Re: What would you do with 20k?

HiLine — Sat, 20 Apr 2013 22:04:47 GMT

@rebuildingmission2013 wrote:
Buy Bitcoin whenever it hovers around $50 range and sell above $125.

Instant Profits...

As if not enough people are doing it

Re: What would you do with 20k?

IOBA — Sun, 21 Apr 2013 02:08:57 GMT

Hi, it's me. The gal who buys a CD every two weeks.

If you are interested, private message me, and I can tell you how to get a triple bonus on your's and your wife's IRA account. (Anyone can send me a private message if you want to know how to do this. And yes, it's legal.)

And I am a big advocate for paying off debt. With the help of our CD's, we bought a house in June 2012, transferred the balance to a no interest/no fee cc in January 2013, and just paid off the balance this month, April 2013. I still have more than 30 CD's active and growing.

We are now moving towards doing a triple hit (my term) on the IRA's for 2013, 2014, and 2015. I should be receiving a 3% bonus on making 15k IRA contribution. That is $450 in free money. It sounds like you and your wife (combined) could receive $900 in free money. Legally.