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Author: lilinky Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308544  
Subject: Cash out Bleeding Roth IRA to get out of Debt? Date: 2/16/2006 2:35 PM
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Hello,
Just wanted to see if anyone had any advice about a move I am considering. I have accrued roughly $6000 in CC debt. (which I am paying $1500/ month towards- but find myself perpetually facing a CC debt number b/w $3000-6000. I am discovering a CC spending problem I cannot seem to curb- I have tried freezing the cards, leaving them at home, ended up discovering I have memorized the numbers, etc..basically the only solution I see is closing the accounts ASAP and living on a cash basis only.) I have managed to maintain excellent credit for the past 6 years that I have had credit so I think I will not be in too much trouble when I apply for student loans in a few years.

I am planning on quitting my job to go back to school full time and need to build a cushion of savings as I have no savings now. I also currently have of a Roth IRA valued @ approx $7000 (all blue chip stocks). My original investment into it totalled $11,000. ($3,000-2002+ $4,000-2003+ $4,000- 2004. Since my RIRA is bleeding at a sad rate should I just cash it in (no penalty taxes- since I lost money on it-right?) and pay all of my CC debt off, cut them up into little pieces and then immediately funnel the amount I have been paying towards CC debt into a savings account? I have been reading everywhere that to cash in an IRA or 401 K is a bad idea- but I've already lost so much money already... Granted I am also aware that every year I am young and invest means a heck of a lot more in the long run but all that is figured on an retirement account actually accruing interest, isn't it?

I know that I may not be in a position to contribute to any retirement account until I finish school (in about 7-10 years) + another 5-7 years to pay off my school debts. I am 25 right now but am at a loss for any other alternative..

Advice is much appreciated.

Thank you.
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Author: fredinseoul Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221347 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/16/2006 3:06 PM
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Since my RIRA is bleeding at a sad rate should I just cash it in (no penalty taxes- since I lost money on it-right?) and pay all of my CC debt off, cut them up into little pieces and then immediately funnel the amount I have been paying towards CC debt into a savings account?

I think you are confusing capital gains taxes with the penalties. If you cash out your RIRA, you will pay a 10% penalty. Then, they do an automatic withholding of another 10%. You can probably get that back when you pay your taxes, but you still lose money.

I know that I may not be in a position to contribute to any retirement account until I finish school (in about 7-10 years) + another 5-7 years to pay off my school debts. I am 25 right now but am at a loss for any other alternative..

So when will you start saving for your retirement? This sounds like you will stop for nearly 20 years. That takes you out of the prime years to save money.

I am discovering a CC spending problem I cannot seem to curb- I have tried freezing the cards, leaving them at home, ended up discovering I have memorized the numbers, etc..basically the only solution I see is closing the accounts ASAP and living on a cash basis only.)

This is your best bet. The problem is your habits. You spend money you don't have. Now, having spent money you don't have, you want a quick fix. You could cash in the IRA, but as a full-time student with little income, do you really believe you won't run up the cards again?

Change your spending habits. Pay down the debt. Save for school.

FWIW, I would suggest a second job until you've paid down the debts and saved for school. It helps you earn money, it keeps you too busy to spend, it gives you a goal to chase before you become a student. But even that won't help unless you change your spending habits.

fredinseoul



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Author: Patzer Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221351 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/16/2006 3:20 PM
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I am discovering a CC spending problem I cannot seem to curb- I have tried freezing the cards, leaving them at home, ended up discovering I have memorized the numbers, etc..basically the only solution I see is closing the accounts ASAP and living on a cash basis only.

The good news is, you recognize the problem. You have even identified a common recommendation made here. That puts you ahead of many people who come here for advice.

The bad news is, until you correct this problem any financial plan you can devise will fail. Think about that for a few minutes.

I have managed to maintain excellent credit for the past 6 years that I have had credit so I think I will not be in too much trouble when I apply for student loans in a few years.

I'd recommend curing the spending problem (easier said than done, but posssible) before getting student loans. If you don't control your spending, the money from student loans does not help you as it should.

I am planning on quitting my job to go back to school full time and need to build a cushion of savings as I have no savings now.

Build the savings before quitting the job. If the savings aren't accumulating, you still have a spending problem to work on. No plan will succeed unless the spending problem is cured first, and being able to stay out of debt and accumulate savings is an excellent indicator of spending being under control.

Since my RIRA is bleeding at a sad rate should I just cash it in (no penalty taxes- since I lost money on it-right?) and pay all of my CC debt off, cut them up into little pieces and then immediately funnel the amount I have been paying towards CC debt into a savings account?

No, no, a thousand times no. The fact that your RIRA has been losing money is not relevant to curing the spending problem, which should be your top priority. Invest the RIRA differently, stop contributing, whatever; but do not liquidate assets to pay off debt before fixing the spending problem. Doing so just sets you up to create more debt, only the next time you won't have the RIRA to fall back on.

You have discovered that you are in a hole. The first thing you need to do is stop digging. It may take a while to figure out how to stop digging, but do this before you embark on other financial plans. Every financial plan you can make will fail until you figure out how to stop digging.

I know that I may not be in a position to contribute to any retirement account until I finish school (in about 7-10 years) + another 5-7 years to pay off my school debts. I am 25 right now but am at a loss for any other alternative.

If you can put $1500 per month toward credit cards, I have a hard time imagining how an additiona 7-10 years of school can pay off financially. Yes, it could be very rewarding in terms of doing the kind of work you want to do; but that opportunity will still be there if you get your financial house and spending habits in order before you start back to school.

Patzer

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Author: erichollins Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221352 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/16/2006 3:33 PM
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As someone who easily remembers credit card numbers as well, call the companies and get new cards with new numbers. Then, activate them and put them in ice. Don't even use them once.

I don't know how many times I've used my credit card number without seeing the card because I have the number memorized. This isn't just a single card, either. I have the number memorized for about 3 cards and including at least 1 card that I don't use anymore. I'm good with numbers. What can I say?





Eric


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Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221354 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/16/2006 3:43 PM
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Just wanted to see if anyone had any advice about a move I am considering. I have accrued roughly $6000 in CC debt. (which I am paying $1500/ month towards- but find myself perpetually facing a CC debt number b/w $3000-6000. I am discovering a CC spending problem I cannot seem to curb

So, honestly, how would the Roth help? Hint: It wouldn't. You'd use the money to pay down your cards and then just run them back up again as long as your spending problem exists. Period. You'd cash our your only retirement savings just to run your debt back up again. You'd be back where you started, but worse.

THERE IS ONLY ONE SOLUTION TO DEBT. You have to spend less than you make. PERIOD. Moving money around, changing this to put in that, robbing peter (your Roth) to pay paul (your CC company) is all just a shell game. You have to leave to live below your means... significantly. Period.


have tried freezing the cards, leaving them at home, ended up discovering I have memorized the numbers, etc..basically the only solution I see is closing the accounts ASAP and living on a cash basis only.)

If you honestly don't think you can control yourself. Fine, do it.

Or maybe, close them all but one, but cut that one up too. Then call that one card company and tell them you lost the card and need a new one with a new number. As soon as you receive it, hold it upside down and cut it up without ever looking at the number.

There, now you have one open account, without a number you don't know. It will allow you to have that account open in case you ever get control of your spending, and it will keep you with a credit history, so you won't have to start over again.

And live on cash. If all else has failed, its a fine idea.


Since my RIRA is bleeding at a sad rate should I just cash it in (no penalty taxes- since I lost money on it-right?)

Actually, I'm not going to lie, even if I might like to to discourage you. You *can* take this money penalty and tax free. You can withdraw your contributions from a Roth tax free, and since you have less than that in your Roth, it wouldn't have any taxes or penalties.


Granted I am also aware that every year I am young and invest means a heck of a lot more in the long run but all that is figured on an retirement account actually accruing interest, isn't it?

Well, yes, but what are you invested in? Do you really think its gonna go down forever? That market goes down, it goes up, but in the long term the general direction is up.

Of course, this brings up the important question of what the heck you were invested in that lost ~30% from 2003-2005. But as long as you can't control your spending in order to secure your future, I'm not going to ask you to to start doing asset allocation. Leave it alone and it will go up in the long term.

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Author: CSDunford Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221358 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/16/2006 4:00 PM
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Have you considered going to school part time in the evenings/weekends? You could keep your job, continue to pay down debt, and might not require the student loans at all. It's hard (I'm doing it now) but I can definitely appreciate it much more at my ::cough, cough:: slightly advanced age than I did back in the hazy days of my youth.

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Author: bmillz Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221362 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/16/2006 4:25 PM
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I think you are confusing capital gains taxes with the penalties. If you cash out your RIRA, you will pay a 10% penalty. Then, they do an automatic withholding of another 10%. You can probably get that back when you pay your taxes, but you still lose money.

Just as a clarification, you can withdraw contributions that you previously made to a Roth IRA at any time without penalty. So the OP would be able to withdraw all the money from the IRA without penalty or taxes.

I'm not saying that the OP should do it, only that he could do it.

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Author: lilinky Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221363 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/16/2006 4:40 PM
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Thank you for your speedy and thorough advice. I will not be raiding the RIRA afterall.
Erichollins thank you for the CC tip- I am ordering replacements as soon as I finish this post.

Going back to school is not for financial gains, but to fulfill myself. I work a decent paying paying job that sells people's souls (TV) and I just can't see myself doing this too much longer without becoming a horrible person. A second job is definately not a possibility as I work 60 hrs a wk, volunteer 15hrs a week and am going to school at night. I can't find another job that pays as well and still gives me the flexibility to do my volunteering and night classes.

I LBMM in every way except when faced with an animal who needs help. I live in an unsavory neighborhood with 2 roommates, pack all my meals- every day, don't buy shiny electronic thingys, don't have cable, or a TV(which is pretty funny considering where I work), or new clothes, I pick up all of my furniture off the street, and don't own a car. I live off of 25% of my income (50% goes to the CC payments)-the remaining 25% of my salary and what puts me into this revolving debt- I keep paying for food, medicine, suppliments and veterinary expenses for the rescued animals I work with. I live on a ridiculously tight budget for myself so I figure if I don't have the cards the most I can do is empty my pockets and have to learn how to say no. I'm not going to pretend this will be easy for me, but its something I'm going to have to learn sometime, especially if I hope to be a vet one day.

I don't really have a plan for the retirement stuff now that I am looking at going back to school for so long. This is a relatively recent decision and I haven't figured out all the rammifications yet (I joined MF 3 yrs ago when I planned to stay in Entertainment and splurge on MF renewals cause I love the message boards so). I'll troll the student debt sites for an idea of what I'm getting myself into.

And will continue to take the excellent advice of the MF memebers:)

Thank you again!

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Author: LaughingRaven Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221380 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/16/2006 7:02 PM
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I LBMM in every way except when faced with an animal who needs help. I live in an unsavory neighborhood with 2 roommates

Did anybody else get the wrong idea at this point?

the remaining 25% of my salary and what puts me into this revolving debt- I keep paying for food, medicine, suppliments and veterinary expenses for the rescued animals I work with. I live on a ridiculously tight budget for myself so I figure if I don't have the cards the most I can do is empty my pockets and have to learn how to say no. I'm not going to pretend this will be easy for me, but its something I'm going to have to learn sometime, especially if I hope to be a vet one day.

I've been there. I'd give to any cause that crossed my path, wanting to cure the ills of the world, but never really noticing how dire my financial situation was growing.

What you said is exactly what I had to do; learn to say no, and take care of yourself so that you're in a better position to care for others. I've had to cut back on the giving for a while, which really bugs me, but once I'm out of credit card debt, I'll be able to donate more money and more time than I have before.

--
LaughingRaven

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Author: DeltaOne81 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221387 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/16/2006 10:03 PM
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the remaining 25% of my salary and what puts me into this revolving debt- I keep paying for food, medicine, suppliments and veterinary expenses for the rescued animals I work with. I live on a ridiculously tight budget for myself so I figure if I don't have the cards the most I can do is empty my pockets and have to learn how to say no. I'm not going to pretend this will be easy for me, but its something I'm going to have to learn sometime, especially if I hope to be a vet one day.

Its very very noble of you, lilinky. I'm an animal lover myself.

But like any other expense, charity has to be budget item. And that budget item is NOT 25% of your budget. Period.

There are ways you can help animals without paying for their lives. Bring them to a local ASPCA maybe? Give a fixed amount every few months to your local kennel or other charity? A couple summers ago there was a stray cat always wandering in my neighborhood. I made friends with it a little, got it inside and trapped it in my room for the night and brought it to the local ASPCA in the morning. I did a good deed for that cat, and all I gave up was a little tuna.

I'm not saying that your situation is as easy as that, but I am saying that you can limit it to a smaller part of your budget, and still do your part by finding an organization or charity who's job it is to help them.



And imagine, if you can save that 25% of your salary, one day you'll have millions, retire on easy street, and then you can leave half your estate to the ASPCA or start an endowment for your own animal rescue center. And you'll have helped more animals total than you ever could have by living in debt and trying to save them one by one.

And ya know what, if you do that, come fine me, and I'll give a very generous donation to help get Lilinky's Animal Rescue Center off the ground :)

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Author: lanshark Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221409 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/17/2006 9:58 AM
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Suze's Orman latest YF&B book touts the strength of investing younger - that you'll have exponentially more money when you do retire. So, maybe you change where you're invested in, but you do want to think seriously before withdrawing the Roth IRA money completely. Yes, losing ~40% is bad, but you can (and should) redirect it into something else that can show a decent return.

Is quitting your job the only way to go to school? Perhaps part-time schooling will work as a compromise. Try some courses at a community college, or distance learning.

- Lan

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Author: lanshark Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221410 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/17/2006 10:00 AM
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I don't know how many times I've used my credit card number without seeing the card because I have the number memorized. This isn't just a single card, either. I have the number memorized for about 3 cards and including at least 1 card that I don't use anymore. I'm good with numbers. What can I say?

Do you know the CID code too? ;-)

- Lan

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Author: mastiffmama Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221411 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/17/2006 10:09 AM
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Suze's Orman latest YF&B book touts the strength of investing younger - that you'll have exponentially more money when you do retire.
I would not recommend this book to OP - in my view it gives you permission to add to your debt load because you have high student loans, live in a different world than past generations, NEED credit more than your parents might.

I rolled a RIRA that had lost about 50% from 2000 to 2005 into a new fund that is doing so much better. I think you'll be glad that you decided to keep this intact.

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Author: HomerBufflekill Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221413 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/17/2006 10:46 AM
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You have a spending problem. Fix that.

Sell the individual stocks and buy Index Funds.

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Author: numbrel Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221431 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/17/2006 12:35 PM
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I'll troll the student debt sites for an idea of what I'm getting myself into.

I don't know if they have been discussing the recent student loan articles that have been appearing in magazines and papers. I tried to find the threads on TFM that have discussed this, but can't find them right now.

You need to be aware that student loans stay with you for the rest of your life, even if your only income is social security. Supreme Court just ruled that a 67 year old man with serious medical problems still had to pay off his student loans. One of the TMF boards also recently discussed an article about how hard it was for a couple to continue paying off $100,000 in student loans. One was a message therapist and the other an accupuncturist.

While some veterinarians can make a lot of money treating Fifi and Fido for millionairs, it sounds like you might be happier treating animals belonging to regular folks and doing pro bono for the Humane Society. Not a lot of money in that area, so you need to carefully investigate your earning potential before you sign up for loans.

Of course, this could be a moot point. You say you are taking night classes. Are those science classes and are you getting straight A's? My husband was in pre-vet until organic chemistry flushed him out. There are fewer veterinary schools than people-med schools in the US and the compition is stiffer.

If you can make the grades and get into Vet School, you need to understand that you will not have the time for your volunteer activities and you certainly won't have the money for caring for animals. Maybe you can make your time now count as preparation for the future. No volunteering and no animal assistance while you pay off your bills and bank money for school, including a second job maybe. You can also get used to not having enough sleep, which will happen in vet school.

The more money you have going into school, the less you will need to borrow and more opportunities you will have when you get out of college to take the job you want rather than the job that will pay off your student loans.

Barbara

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Author: lilinky Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221454 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/17/2006 4:09 PM
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Laughing Raven and Delta181,
You guys are right- Thank you for reminding me that it is better in the long run to not put myself further into debt now, so that I can do a heck of a lot more with my $ later, for perhaps lasting change. I used to give a fixed amt to several charities, but I have suspended my donations. I figure that I will be giving back my time and effort, in the future, to make up for how bad I feel for doing that now. The orgs I work for are all grass roots and receive no gov't assistance. They rely soley on public donations to function. One person in one of the orgs got a lot of bad publicity which killed all public donations. Regardless of who was at fault, there are over 2000 animals who still need food and medical attention. We are trying to turn NYC into a No Kill City- but sadly, it's not there yet. If the org was shut down , all of the animals would have been euthanized because you can't drop off 2000 animals at any of the govn't funded shelters. It wasn't just me donating time and $ to these orgs, but all of the volunteers that kept almost all of those animals alive and well during the worst of it. (BTW, a lot of them have loving forever homes now. Yay!)

Lan,
No, correspondence schools and community college aren't an option. But I am taking math and science courses (with labs) part time while working full time. My intention is to continue doing part time until I get into vet school- then it is full time only as there are no part itme options. I knew my CID codes, too BTW- but since I shredded (yes, shredded)- my CCs yesterday and asked my IT guy to block all the online pet supply sites I visited, I guess they don't count anymore:)

Mastiffmamma,
Is there a place where I can go to read more about the specific processes of rolling over my RIRA? I checked out the Fool IRA guide- but still feel uneasy. I currently have a sad portfolio of about $7000 solely in Coke, GE, Marvel, J&J, and Netflix stocks (yes, this is why it did so badly...) I think there is like $93 in a MMA that Wamu forced me to open. I don't want Wamu to have anything to do w/ my RIRA anymore. All I want are some Vangard index funds- any pointers on how to tell Wamu to shove the $350/yr they charge me in fees? Someone recommedned Scottrade and I looked at their website- but they don't file papers for you. I don't even know what papers they are talking about....:(

Barbara,
I read about the student loans following people around and have also heard about the government trying to garnish your wages, like deadbeat dads, if you neglect paying them off (Maybe they have suceeded already?) I was actually hoping that if the Vet school dream works out I'll be able to apply for a vet school debt forgiveness program which pays off all or most vet school loans in return for working in an underserved rural or urban area for a specific amount of time. I am planning on focusing in shelter medicine and think qualifying may not be out of the question. Since I am working, I am not accruing more debt for the school I am enrolled in now. So If I can pay off the CC and NOT donate any more $ then I should be enetering Vet school w. a clean slate (hopefully + a chunk of savings), if not a retirement plan, (yet!- I am still trying to be a Fool, after all)

Going to school part time while working and volunteering hasn't been easy- but I don't feel I have much of a choice right now. As you pointed out, getting into vet school isn't easy, statistically it's 10xs harder in this country to become a Vet than a Dr. I know this- but I let myself be deterred once before by people telling me I couldn't do it. I'm not willing to listen to them anymore. I was put on this earth for a purpose and I'm willing to do what it takes to get there:) I don't have a choice about putting off any of my activities. The average applicant has approximately 1300 hours of animal volunteer experience. To be perfectly honest, I started volunteering because I had to- but, now, I give everything I can to them (time, money, administrative support, etc), because of how much they have enriched my life. And yes, I have kept my 4.0 so far (Bio, Labs, Chem, Calc, Stat- big bad Orgo is next yr). I don't think it's as unrealistic, to try, as other people have made it out to be. But I'll only find out if I try:)

I'm well aware that if by some miracle I do get into vet school, I will not have time, $, or sleep. But those are things that I have gotten used to doing relatively without anyway. I'm not scared.

Thanks again to all of you who make the Fool Disscussion Boards a wonderful place to learn:)

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Author: DizChick Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221464 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/17/2006 6:45 PM
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I am planning on quitting my job to go back to school full time and need to build a cushion of savings as I have no savings now. I also currently have of a Roth IRA valued @ approx $7000 (all blue chip stocks). My original investment into it totalled $11,000. ($3,000-2002+ $4,000-2003+ $4,000- 2004. Since my RIRA is bleeding at a sad rate should I just cash it in (no penalty taxes- since I lost money on it-right?) and pay all of my CC debt off, cut them up into little pieces and then immediately funnel the amount I have been paying towards CC debt into a savings account? I have been reading everywhere that to cash in an IRA or 401 K is a bad idea- but I've already lost so much money already... Granted I am also aware that every year I am young and invest means a heck of a lot more in the long run but all that is figured on an retirement account actually accruing interest, isn't it?



It seems like you are assuming that your Roth will continue to lose money. Could you re-work the investments to stop the bleeding?

DizChick

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Author: Booa Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221484 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/18/2006 4:03 AM
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Is there a place where I can go to read more about the specific processes of rolling over my RIRA? I checked out the Fool IRA guide- but still feel uneasy. I currently have a sad portfolio of about $7000 solely in Coke, GE, Marvel, J&J, and Netflix stocks (yes, this is why it did so badly...) I think there is like $93 in a MMA that Wamu forced me to open. I don't want Wamu to have anything to do w/ my RIRA anymore. All I want are some Vangard index funds- any pointers on how to tell Wamu to shove the $350/yr they charge me in fees? Someone recommedned Scottrade and I looked at their website- but they don't file papers for you. I don't even know what papers they are talking about....:(

If you're interested in Vanguard index funds, I'd call Vanguard and ask them what you need to do. They're really good about walking you through it--I had to rollover my tiny pension fund from being a grad student after every summer, when I was no longer an "employee," but a student, and they were good about it. They told me exactly what to ask for, (a check, made out to Vanguard, or me, or some bizarre combination of the two--see, call them and ask, I swear, they'll tell you in excruciating detail, and you can call back if you get confused). They'll tell you what to tell WAMU to get your money out, though you'll have to think up your own colorful metaphors for telling WAMU to shove their fees. :-) I like telling them to fold it up until it's all corners, and then put it where the sun don't shine. :-)

Vanguard will hold your hand and walk you through the rollover. Give them a call. :-)


--Booa

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Author: mastiffmama Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221565 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/20/2006 10:15 AM
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Is there a place where I can go to read more about the specific processes of rolling over my RIRA?

I'm not an expert here. I rolled them into a Vanguard fund, and all I did was call the custodian I was unhappy with to see if there would be any sales fees (no), then call Vanguard. I think I actually did the whole transfer online.

You might want to check out the Retirement Investing board also:
http://boards.fool.com/Messages.asp?bid=100154

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Author: legalwordwarrior Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 221581 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/20/2006 12:38 PM
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<I have managed to maintain excellent credit for the past 6 years that I have had credit so I think I will not be in too much trouble when I apply for student loans in a few years.>

If you can find any way to pay for school without the student loans do it! The problem with student loans is that they offer you a maximum amount each semester, and you think "Gee, that's not so much" but instead of doing hard line number crunching to see how much you really need, you end up accepting the max each semester. And while you don't have to pay them back right away, unsub loans do begin to accure interest right away. With all the changes that are coming through with interest rates, pay back schedules, etc. you could have the equivalent of a house notes worth of student loans by the time you graduate in 7-10 years. Not even bankruptcy will get you out of repaying them! So before you jump into the going back to school full-time, I'd recommend that you a one or two classes a semester after working hours to see how you do academically, then, if you're doing well, apply for scholarships everywhere you can. In addition, you can look into whether your job offers tuition reimbursement. My company offers reimbursement based on grades: A=100%, B=80%, etc. I've been through the whole student loan thing with DH and it's amazing what you think you "need" when the financial aid department is offering. Had we worked a little harder on finances back then, we wouldn't be in the mess we're in now! Planning to finance school on loans is ALWAYS a bad idea, unless it's a short term one in your last semester in school!
LWW
paying back a mountain of student loans that we really really needed(ha)!

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Author: exoticatom One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 222253 of 308544
Subject: Re: Cash out Bleeding Roth IRA to get out of Deb Date: 2/27/2006 10:32 PM
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Going to school part time while working and volunteering hasn't been easy- but I don't feel I have much of a choice right now. As you pointed out, getting into vet school isn't easy, statistically it's 10xs harder in this country to become a Vet than a Dr. I know this- but I let myself be deterred once before by people telling me I couldn't do it. I'm not willing to listen to them anymore. I was put on this earth for a purpose and I'm willing to do what it takes to get there:) I don't have a choice about putting off any of my activities. The average applicant has approximately 1300 hours of animal volunteer experience. To be perfectly honest, I started volunteering because I had to- but, now, I give everything I can to them (time, money, administrative support, etc), because of how much they have enriched my life. And yes, I have kept my 4.0 so far (Bio, Labs, Chem, Calc, Stat- big bad Orgo is next yr). I don't think it's as unrealistic, to try, as other people have made it out to be. But I'll only find out if I try:)

I'm well aware that if by some miracle I do get into vet school, I will not have time, $, or sleep. But those are things that I have gotten used to doing relatively without anyway. I'm not scared.


Hey l/i -

Having bailed out of a well-paid job to go back to school myself, I heartily applaud the notion! After starting out as an engineer, I did a night masters in applied physics, then went back and chased particles full time because that was what I wanted to do. I was also told that I shouldn't take the chance and probably couldn't cut it - including by my grad school advisor. The transition was wrenching, the level of work almost killing, the poverty abject - but the adventure exalting and the overall experience beyond price. One of the main things that kept me going was the knowledge that I wasn't supposed to make it - having disregarded such advice there was no option of an honorable retreat!

Quitting work and going back to school to pursue something you really love is much more of a life-changing experience than a few grand sitting in your Roth (or not) will ever be; if you decide to go for it - and it sounds like you should - then you need to really go for it, total commitment, nothing held back - life is for the living! (Much more than it is for the counting, but sounds like you have already figured this out.)

Night school while working is really tough, if you're beating your way through a real science program - you'll never do as well at learning the things you need, let alone knocking down the grades and test scores to land a slot in vet school, as you would if you burn the bridges and march off into the unknown, towards your future - I watched people much more talented than I was fall by the wayside from trying to hold down a job on the side - it's just too easy to try and juggle your time just a bit more, and real learning is just too hard. You'll have plenty of time to earn money later - and there's way more to life than money anyway. (A simple truth which often seems to get lost on these boards.)

Oh, and one final piece of advice, which most of us learn waaaay to late - sleep is king! Trust me, your brain will work much better on a good night's sleep than it will on a few more hours of late night cramming... I repeated that experiment many times!

Bill

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