So lets say I sold my house in Houston and I made out pretty good profit wise. (As long as the buyers financing/paperwork are in line, I will close Feb.27th) After, paying all debts and fixing up my home here in San Antonio, lets say I'll have around 10-15K taxfree(its my first home to sell) leftover. What should I do with it? I've already been told: 1)Refinance with an ARM loan. Very low % for 7 years then they stick you! (Others have told me ARMs were good a few years ago but they are going up and the % rate I'd get when the 7 years were up is outrageous...so dont do it! Also, that would TOTALLY blow my wad and I'd be broke once again) 2)Enjoy the cushion. Don't do anything with it, 'cept leave it in the bank for emergencies. (I've stuggled for so long, I like that idea too) Any other realistic ideas would be appreciated. Thanks!
If it was me, I would invest it or keep it in the bank. Ever since I was 12 years old, I have always maintained a comfortable balance in my bank account. Back in high school it was a couple of hundred. After graduation when I started working summers it grew to a few thousand. It's a nice feeling to know that you have money to fall back on. I don't plan on ever being in debt.
Definitely fund a Roth, but that's only $3K per year but you can still fund it for 2003 until April 15 and also fund 2004. So maybe put the rest into a 12 month CD so you can fund 2005 and repeat for 2006. Sounds dull but you'll be glad you did it when your old. Also, you can borrow from your Roth if you have an emergency. I suggest you set up your Roth at Vanguard to keep your expenses low. Or, you could have the greatest week of your life in Vegas.
I don't know what type of "saver" you are or what type of financial situation you're in, but if it were me, I'd Invest it/put it in savings.
Personally, I'd use 10k to pay off part of my mortgageand keep the 5k around for emergencies....but I'm kind of a nut that way - I hate being in debt. You never know what you can make on an investment, but if you pay off a loan, you make whatever interest you were paying on the loan.
I have a couple of questions regarding Roth IRAs. In a couple of months, I will have enough money in my savings account to cover living expenses for a few months, plus $5000. I want to move the $5k to a Roth IRA. I’m a little confused, from what I’ve been reading Roth IRAs are for retirements, but can’t I use it as a general investing vehicle? Since the money I contribute in the Roth IRA is after-tax, I can access it anytime I need to. Further, I’m not really concern about withdrawing any gains I hope to make off the IRA account. So is my thinking on the right track? I don’t really have any plans for this money for the next 2-3 years, but I still need access to it incase of a major emergency. I just want to move that $5k away from my savings account, cause I’m only getting 1% interest on it.
Unless something's changed recently, you can withdraw any principal on a Roth IRA without any fee. You can pull out up to I think $10k penalty and tax free for a home purchase for example, but only if the funds have been in the Roth IRA for at least 5 tax years. BTW, ING Direct offers 2% on savings.
No, someone's been doing his taxes and trying to remember all the stuff he's forgotten about taxes in the past year.
hookers and booze is a good idea or Las Vegas... or keep a chunk in savings and invest the rest... whatever you do, make that money work for you... you can always send some to your friends on the BBS!!
