UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Next Thread
Author: crazybanshee Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75615  
Subject: Debt vs Retirement Date: 6/13/2001 11:29 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Hi!

I lost just about everything I had in the market last year which left me with about $300 in a ROTH IRA account and a pile of debt. I have 3 questions:

1) I have been aggressively paying off credit cards but to continue on this path will mean no retirement contributions for well into next year. Should I keep paying off the credit cards, or use some of the money for retirement investing?

2) Should I split up the $300 into different stocks or just buy one, and any suggestions on what to buy? ( It is a stock account, not a mutual find account.)

3) After what happened last year, I am literally naseous when it comes to thinking about investing. Any inspiration or guidance in getting back up on the horse? The fall was a LONG way down and it still hurts.

Thanks!!

Recovering riskaholic,
crazybanshee(p)
Print the post Back To Top
Author: JAllen2 One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30240 of 75615
Subject: Re: Debt vs Retirement Date: 6/14/2001 1:55 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Considering the result you have had in the market before I would suggest you use a different method that has a very high chance of success. I would point you to index investing. Just made a post on the Index board regarding the return of various indexes the link is as follows http://boards.fool.com/Message.asp?mid=15169286

I would suggest probably paying off/down your debt before retirement investments. Depending upon the interest rate you have on your debt (assuming Credit Card) 20% will kill "ya".

Print the post Back To Top
Author: JLC Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30258 of 75615
Subject: Re: Debt vs Retirement Date: 6/14/2001 7:43 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
<<<1) I have been aggressively paying off credit cards but to continue on this path will mean no retirement contributions for well into next year. Should I keep paying off the credit cards, or use some of the money for retirement investing?>>>

Your credit cards are probably charging @20%. Paying them off is like getting a guarenteed return of 20%. Can't get that in the stock market. Definitely pay the debt off.

<<<2) Should I split up the $300 into different stocks or just buy one, and any suggestions on what to buy? ( It is a stock account, not a mutual find account.)>>>

With that small of a stake, just by an S&P Index fund. But only after #1 above is taken care of and you have an emergency fund (3-6 months living expenses) established.

<<<3) After what happened last year, I am literally naseous when it comes to thinking about investing. Any inspiration or guidance in getting back up on the horse? The fall was a LONG way down and it still hurts.>>>

Follow steps one and two above and continue to read and study here (as well as other boards). As soon as those have been taken care of, you'll fell like (and more comfortable) in investing again. Have a plan, say invest $50/month (or whatever) and stick to it.

JLC

JLC


Print the post Back To Top
Author: PMcMullenCT Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30262 of 75615
Subject: Re: Debt vs Retirement Date: 6/14/2001 9:30 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
1) I have been aggressively paying off credit cards but to continue on this path will mean no retirement contributions for well into next year. Should I keep paying off the credit cards, or use some of the money for retirement investing?

Your credit cards are probably charging @20%. Paying them off is like getting a guarenteed return of 20%. Can't get that in the stock market. Definitely pay the debt off.

Agreed. It would actually be even better than a guaranteed 20% in the market, since you won't owe tax on that 20% return in the form of reduced interest expenses.


Print the post Back To Top
Author: bigcaat Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30265 of 75615
Subject: Re: Debt vs Retirement Date: 6/15/2001 3:05 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Should I split up the $300 into different stocks or just buy one, and any suggestions on what to buy? ( It is a stock account, not a mutual find account.) I am literally naseous when it comes to thinking about investing. Any inspiration or guidance in getting back up on the horse?

*********************

Banshee.

I agree with the other posters about paying off your debt first. I do want to address the question above, however.

Any particular reason you're stocks rather than mutual funds? If you want to comfortably get "back on the horse," why not take your $300 and roll it over into TIAA-CREF's TCEIX (Equity Index)? It's an index fund and you only need $250 to open the account. (I'm suggesting this, assuming that you have a reasonably long time line left to invest. I'm assuming this because you were holding all stocks, which is high risk. If you are very near retirement age, then a bond fund might be more suitable.)

www.tiaacref.com
TCEIX (Equity Index)
TIPBX (Bond Plus)

Hope this helps.
Caat

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (5) | Ignore Thread Prev Thread | Next Thread
Advertisement