What to do with this $9k?

[ACanthony]

Hello everyone. My name is Anthony. I am new to this site, and from what I have seen, the information provided here is extremely helpful. I thank you in advance for your help in my little dilemma.

Here's my situation. I just graduated college. While I don't really make that much money ($30k/yr as it stands now), I realize I am way ahead of the game, as I'm 24 and don't have any student loans/CC debt, etc. Here's where I'm at financially:
-$2,000 in an ING account (an emergency fund, but also I'm trying to save for a house in roughly 3-4 years)
-$7,000 in a Roth IRA at Vanguard
-$2,000 in my checking account.

I have also had this mutual fund that has been performing terribly, absolutely terribly, over not just the past year, but over the last 5 or so years. Right now it is valued at $9,000 and basically, I want to sell it and put it towards some of my other nesteggs. It is not worth keeping and it's definitely not an option.

My question to you is: what do I do with this $9,000? It is an important decision for me. I think I have a few options:
1. Max out the rest of my 2008 Roth contr. (about $2,000) remaining and stick the other $7k in my ING.
2. Stick all $9k in my ING
3. Put the $9k in a taxable Vanguard account (Vanguard simply because my Roth is already at Vanguard and it would make things easier).
4. Add a little each account (ING, Roth, and checking)

So, what exactly should I do? Thanks again for all your help, and I can't wait to hear your answers. -Anthony

 

[lucija]

I would definitely use the (portion of the) 9K to max 2008 ROTH.

I don't know your actual situation to make any additional recommendations. It may make sense (and it also gives you the most flexibility) to put the rest in your emergency/house account at ING, specially if you're planning to buy a place within next 3-4 yrs.

You may not need an emergency fund at this time, unless you rent/live on your own and are not planning to crash back at your parents place if "something really bad" happens.

You did not mention whether you have access to a 401(k). If you do, are your contributions matched? If the answer is yes to both, I would make sure I contribute at least up to the max matched. Even if you can't swing that with regular payroll deductions, I would do it and use the remaining portion of 9K to pay the bills.

 

[brewer12345]

What are your goals? Which ones are more important to you? That should guide what you do with the money.

Frankly, your e-fund looks kind of skinny to me, so I would seriously consider using the bulk of the money to beef it up. It also gives you options should you stumble across an opportunity of some sort.

 

[Bree]

I agree with brewer here.

Depending on your goals I think you can be much more aggressive if you like.

I'm in a similar situation, but my vice at this time is passive income, not investing. I have found that my efforts put toward building passive income streams pays of much quicker and more than what I have invested in dividend income stocks (mostly banks).

I know this might sound a bit 'out there' but because I am an artist, what I'm working on right now is hiring local artists to turn my sketches into digital artwork that I can then resell over and over again.

The cost of getting the image produced is about 3x the estimated average monthly earning of the image.

Example:
So say I had that 9k as you do, and for that I could get 1000 images produced. Once they were all finished and selling I would be making about $3000 a month (each image earns monthly 30% of what it costs to produce).

So, after 3 months I have my 9k back in the bank, and I also have a positive 3k in passive income on top of that.

Then I'm free to do it over and over again. Rinse and repeat. Things don't happen exactly this quickly, but it's an accelerated example that is completely possible to do over the course of a year or less depending on how aggressive you are.

You can really build up income quickly if you think a bit outside the box, so keep your eyes peeled for opportunities everywhere.

Cheers,

Mitch

 

[angelbaby]

You could invest in yourself!

Here's my situation. I just graduated college. While I don't really make that much money ($30k/yr as it stands now), I realize I am way ahead of the game, as I'm 24 and don't have any student loans/CC debt, etc.... My question to you is: what do I do with this $9,000? It is an important decision for me....So, what exactly should I do? Thanks again for all your help, and I can't wait to hear your answers. -Anthony

Hmm... If you are a low-paid liberal arts grad with good grades like I am, you could do what I am doing now, and use $9K to enroll in the prestigious Tuck Business Bridge program during the summer to get MBA-level training in [FONT=&quot]finance, accounting, managerial economics, [FONT=&quot]marketing, and strategy through coursework taught by Tuck's MBA faculty.[/FONT][/FONT] The program is linked with several prestigious investment banks, consulting firms, and accounting firms like Goldman Sachs, Morgan Stanley, McKinsey & Co., and Deloitte Touche, who are promising its graduates jobs with high salaries, big signing bonuses and all relocation costs covered. Having just one of these companies on your resume is like gold in the corporate world and an easy ticket to business school. And don't worry, they take recent grads too!

I'm going into investment banking....

Investment Banking Salaries

The first two to three years you earn your stripes as an analyst, then they kick you out and make you go to business school to get your MBA. Then you come back as an associate and your pay is practically doubled. After eight to ten years in your career, you could be bringing in $1M a year in salary, excluding big year-end bonuses, which could be as much as 30-60% of your yearly pay.

 

[inquisitive]

Was it Warren Buffett who said that the best investment a person could make is in himself/herself?

That having been said, I also agree with Bree that something more active is in order, whether it be in education which you have positive expectations of or another pursuit. I would also suggest looking into the stock market. Read a few books on investing and then enter into a safe strategy with diversification or stop-losses, the market always goes up over time, so you cannot go wrong. Tax liens and tax deeds seem to be a good investment, but I could not really recommend them as I have no personal experience.