missroserose: (Shake it!)
[personal profile] missroserose
Just to shake things up a bit, this Friday I ask you a question! (But you can still ask me a question, too.)

[Poll #1293225]

I encourage thinking outside the box; if your answer doesn't fit neatly into a category, feel free to post additional thoughts.

Date: 2008-11-07 09:23 pm (UTC)
From: [identity profile] moonwick.livejournal.com
I'm wavering between options 1 and 2. 1 if you have any concerns at all about the security of your current job, otherwise 2. :)

Date: 2008-11-07 10:26 pm (UTC)
From: [identity profile] roseneko.livejournal.com
Yeah, those are the two I'm mostly trying to decide between. #3 would be interesting, but I don't have the tens of thousands you usually need in order to see a real return, and it's a little more hassle than I really want to go through right now.

I would rate my job-security certainty as "fairly certain" (yay city government). The biggest question will be whether they like me enough to keep me at the end of my probation in March, but I doubt that'll be an issue - I seem to get along with everyone well and the work itself isn't hard.

The only real concern for me with #1 is that I'll end up using it for stuff. Not necessarily frivolous things, but semi-important things that I might otherwise have scrimped and saved a tad more to cover. Maybe the discipline will be good for me. :)

Date: 2008-11-09 06:49 am (UTC)
From: [identity profile] strand.livejournal.com
Since you have a gov't job you should be doubly inclined to pay off all debts. Then an emergency fund (three months expenses). Scott Adams has a list of what you should investin and the order you should invest in them (http://www.fool.com/investing/high-growth/2008/10/23/9-things-you-should-do-instead-of-buying-stocks.aspx).

Date: 2008-11-09 09:59 am (UTC)
From: [identity profile] roseneko.livejournal.com
Not a bad list. I have to admit, the "drunk chimpanzee" factor has a lot to do with my hesitancy to look into investing in stocks. I think I am going to keep the cash in savings, though. At least until I feel a little more stable in my new job. Credit cards aren't a problem, thank God and my extreme dislike of debt. :)

Date: 2008-11-07 10:19 pm (UTC)
From: [identity profile] gracewanderer.livejournal.com
Keep three months' expenses in a liquid savings account, and pay off the loan normally. It will help your credit more and you'll remain more secure throughout.

Date: 2008-11-07 10:22 pm (UTC)
From: [identity profile] roseneko.livejournal.com
The biggest draws for me to option #2 are that [a] I'd be that much closer to being completely out of debt (I have a thing about avoiding debt wherever possible), and [b] finishing my car payments a year in advance, and therefore saving several hundred dollars in interest. However, you bring up a good point about my credit score, and it's not like I'm having trouble making payments.

Date: 2008-11-07 10:24 pm (UTC)
From: [identity profile] cyranocyrano.livejournal.com
My choice of Option 2 pends somewhat on the interest rate you're being charged.

Date: 2008-11-07 10:27 pm (UTC)
From: [identity profile] roseneko.livejournal.com
7.35%. Respectable for a used car loan, if not stellar.

Date: 2008-11-07 10:42 pm (UTC)
From: [identity profile] cyranocyrano.livejournal.com
Still, I think, higher than I'm comfortable with.

Date: 2008-11-09 10:35 pm (UTC)
From: [identity profile] joyfulleigh.livejournal.com
Yeah, I'm with cyrano and want to change my vote. I voted #1 for the same reasons as gracewanderer, but this interest rate is too high. If the loan in question is your car loan at 7.35%, get that one paid off as your first priority.

Date: 2008-11-09 10:50 pm (UTC)
From: [identity profile] roseneko.livejournal.com
Another alternative would be to refinance it - as I recall, the prime rate's in the shitter right now, and I also have a longer (stellar) credit history at this point. I may look into doing that, and perhaps shortening the term somewhat.

Date: 2008-11-10 07:32 am (UTC)
From: [identity profile] decibel45.livejournal.com
You should almost always have at least 3 months pay socked away in case of emergency.

I'd look at refinancing, and then GO FOR #3. Now's a *great* time to invest, but remember the cardinal rule of putting money into stocks: don't put anything into the market that you might want back within 5 years. As for learning, I highly recommend http://fool.com

Date: 2008-11-10 01:07 pm (UTC)
From: [identity profile] joyfulleigh.livejournal.com
Just check your math carefully. If you only have a year left on your current loan and the only loans you can get now are three year loans, you may end up paying more even if the interest rate is lower. Or, you could refinance to get the lower interest rate, but plan on paying it off early (make sure there are no penalties for early payoff, and then pay more each month than is really due) even if the term of the loan is long.

Another alternative is to go half-and-half between options 1 and 2. Set up a high interest savings account or no-risk CD for some of your "extra" money even if it doesn't equal three months' salary, and pay off some of that car debt with the rest.

Date: 2008-11-08 12:24 am (UTC)
From: [identity profile] epa-flip.livejournal.com
My answer is of course dependent on the interest of the installment loan being more than 1%, and you have sufficient savings already.

Date: 2008-11-08 12:24 am (UTC)
From: [identity profile] epa-flip.livejournal.com
The "Hey, you live in Alaska! Here's your check!" payment?

Date: 2008-11-08 12:29 am (UTC)
From: [identity profile] roseneko.livejournal.com
Hee. No, this year that went to our PAX trip. I have a bit saved, and I'm trying to decide where I want to concentrate my resources.

Date: 2008-11-08 04:34 am (UTC)
From: [identity profile] errant-variable.livejournal.com
BLOOD!

Seriously, once people realize "hey we aren't fucked after all" stocks are going back up. Buy while you can, pref. solid tech - Apple, Lockheed-Martin, anything that fell but shouldn't have.

Date: 2008-11-08 05:09 am (UTC)
From: [identity profile] borismarkovich.livejournal.com
I'm fairly convinced that there are a number of really smart people riding the waves right now. I would be to if I actually, you know, had money.

Date: 2008-11-08 04:48 am (UTC)
alexmegami: (Default)
From: [personal profile] alexmegami
Moar BPAL. Come with me into the depths of scented madness!

Date: 2008-11-10 05:41 pm (UTC)
From: [identity profile] jamesd.livejournal.com
What you should do is:

1. Three months in at least two different accounts (I've had three different providers become insolvent and it's irritating to temporarily lose access to a one year cash safety margin, which was the case for one of them. But I have others and those keep it to only irritating. If I'd had all of my cash in one place and needed emergency money it could have been more than irritating. Though I also have several credit cards and two arranged overdraft facilities as backup for that.

2. Refinance the loan to three years. Partly to get a lower interest rate. The longer term, even if at the same rate, is to keep on producing a long list of "on time" entries in your credit report. That's worth more to you than the interest cost and no debt and utility bills are not as effective. You aren't paying interest, you're buying an improved credit score.

3. Next time you buy a nice moderately expensive home item, do that with debt as well and put he cash into a savings account of some sort. Same "on time" credit report entries reasoning.

Then when you come to get more significant credit where rates are far more important to you you'll look like a nice reliable payer.

It's irritating that no debt does less for your credit score than regularly serviced debt but those are the rules.

The rules for me are a bit different because I already have a nice cash float and some debts being serviced (though 0% debt for 15 months for 3% fee, for example, so I'll make a profit on it). Corporate bond and equity mutual funds for me. We're in times we'll only see three or four times a lifetime and profits are calling..

You might go with the mutuals once you have those other things in place. Now's a nice time for drip feeding to use purchase price averaging to reduce the volatility in the market. I've seen one of my tax exempt accounts changing in value by as much as 8.5% up and 7.6% down in one day in the last three weeks (with around 15 mutuals in it). That's volatility! Definitely not for the faint-hearted.

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