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1.5k points · 5 days ago

Hi everyone,

I’m the LAOP. I just wanted to drop by and say thank you to all of your inbox messages. I think I’ve gotten over 100 at this point. Thank you all for your kind words. I’m so greatful for everyone who messaged me, and I’ll respond to every single one.

Reddit, I love you too.

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Original Poster276 points · 5 days ago

So sorry you have to deal with this.

I think the joke is that the background is a sewage treatment plant...?

Original Poster17 points · 21 days ago

No, that’s the Chevy factory... Also happy cake day!

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Oh dang nice. It looks oddly similar to a sewage treatment plant I visited on a class trip a while back 😂 and thanks!!

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Are you asking how to borrow student loans?

Fill out your FAFSA at fafsa.gov to get lower interest rate federally subsidized student loans or pell grants. If that doesn't fully cover your tuition statement, see about getting scholarships or assistance through your school. Failing that, apply online with various lenders like Discover, Ally, Navient, et al, with a co-signer ready to take responsibility for the debt should you fail to pay. Recommend only taking out what you absolutely need to cover tuition and basic living, don't over-borrow to have extra spending money twice a year.

I've only ever needed to get one rather small private loan for school, but when I did so I got it through Discover, so that's the only company I can personally speak for.

That said, Discover has been pretty good for me personally. Basically you'll go through their loan application, state how much you need on your loan, enter personal info and such, complete the application, and then send it to your co-signer who will review it and sign on. Then you get to pick the various loan options, typically 3 types with fixed, variable, and pay during school or defer until after. You can just email them an invite to the loan and they just need to make an account to access it.

An 8.31% interest rate is high, but its not unheard of for student loans. My current private student loan is at 9.44% variable, and my federally subsidized/unsubsidized loans hover between 4-5.5%. So its not out of the realm of possibility.

Hope this helps!

I'm a fan of Dave Ramsey, so I will sort of use what his system is in my answer to your question. The short of it is that you should stop funding retirement accounts until all of your debts are paid off.

Take your savings account down to $1,000 from $12,500 and use that $11.5k to pay off some of the student loans. Typically, Dave Ramsey recommends listing the debts smallest to largest, paying the minimum on all of them, attacking the smallest with everything you've got, and then using those funds + the minimum to attack the next one, and so on, and so on.

So this is the order he recommends paying it off in:

  • Loan F (Paid by savings) - use minimum payment for loan A
  • Loan C (Paid by savings) - use minimum payment for loan A
  • Loan B (Paid by savings) - use minimum payment for loan A
  • Car loan (Paid by savings) - use minimum payment for loan A
  • Loan A
  • Loan E
  • Loan D
  • Loan G
  • Loan K
  • Loan H

Ultimately, you're $118,000 in debt and broke. You need to cut your expenses and increase your income, which it appears you're already set on doing by your certification training, but you really need to jump onto these loans as quickly as possible and pay them down. Debt is debt, and as Dave would say, "the borrower is slave to the lender".

Original Poster1 point · 26 days ago

I’m not familiar with Dave Ramsey, so I’ll have to look into that. I do have a couple questions though. I’ve been adhering to the avalanche mentality, which encourages targeting highest interest rates over smallest loan amounts. Wouldn’t that save me more money in interest over time?

I’m not sure I’m comfortable running my savings so low. I’ve had ‘emergency funds’ burned into my mind by this sub. Also, my husband and I never had a ‘wedding/celebration’ that we are saving for. How do I manage to keep savings so low but feel confident that I can cover something like my car breaking down?

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Avalanche v.s Snowball repayment methods are both great. Whatever you feel comfortable doing is what you should do. I prefer the Snowball method because you can get rid of all of the annoying, small loans, and just focus on the big ones. And if you were really adhering to the avalanche method, you'd be OK with paying off your car early, just saying. Car loans are still debt.

You don't have to diminish your savings that low. Dave Ramsey has a system of 'Baby Steps', step 1 is to get $1k in savings in the event of any car issues or medical bills, etc etc. If you have to use those funds, you simply just replenish it after you use it and then start back on the loan payments after.

This sub is very protection oriented, which isn't a bad thing. I think a savings of $2k or $3k should be OK for you all right now if you're wary about going too low. The savings are there for car breakdowns and the like. Don't feel bad for using it for those things.

As far as the wedding/celebration goes, you simply cash flow it. Add a weekly or monthly payment into your "Wedding/Celebration Fund" of X dollars built into your budget so that you have a fund amount of your desired total by the time you need to use it. For example, if you need $5,000 saved in 1 year for that, simply put $416 per month aside for that fund, or about $100 per week. Put it in an envelope at home or keep it separate from your checking account funds.

If you half-do the debt repayment you'll be paying on these loans for ever. That's why I personally recommend tackling your loans head on first so you can be done with them and be debt free. Millions of people do this every year!! You can do it too.

There are generally 2 methods of paying off loans. Going from highest interest rate to lowest, or from smallest loan to largest.

There are benefits for both, but I personally like the snowball method (going from smallest loan to largest). It basically works by making minimum payments on all of your loans and putting ALL extra cash towards that first loan, then rolling over all of that extra money + the minimum payment onto the next loan, and so on. Both methods are correct, neither are inherently wrong, and you'll end up paying all of the loans off around the same amount of time with either method.

4

Hi guys!

I'm about to sign for my first apartment and am looking at renters insurance policies. My new apartment complex requires me to carry $100,000 in "Personal Liability Insurance coverage". I've done a quote with a national insurance brand and they have something labelled as "Family Insurance Protection", which by description sounds like the same thing, but I want to be sure, as I need to have this policy in place at signing.

Thanks in advance!

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Almost certainly "YES", however since "Family Insurance Protection" does not include the word "liability" you should speak with your agent/broker - or the carrier if this is a direct writer - and have them verify this. When reading an insurance policy all word and terms that are printed in bold type are defined within the policy. You scroll through the policy to "Definitions" and you will find each of those words or terms laid out as they apply to the policy.

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Original Poster1 point · 27 days ago

Thanks for the info! I’ll definitely reach out to make sure everything lines up correctly.

5 points · 27 days ago

Same Same

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Original Poster1 point · 27 days ago

Cool cool thanks!

180k

Pay off apartment: 141,000

Pay student loans: 121,000

Buy a used car: 116,000 - 112,000 (5-9k is really the highest you need to go for good reliable vehicles).

Put 6 months of expenses in a high yield easily accessible savings account, like Ally.

Max out a Roth IRA/401k for 2018 and 2019: 5,500 for IRA and 18,500 for 401k

Invest the rest with a financial adviser. Don't screw around learning how to invest with this amount of money left over. Leave yourself 1 or 2k if you want to play with stocks but don't do anything more than you're OK with losing. Gold and silver are not really good investments imo.

0

2018 standard deductions:

  • $0.545 per mile for business
  • $0.18 per mile for medical or moving
  • $0.14 per mile for charity

I also learned if you're a W-2 employee you can only deduct the mileage if the total deduction is 2% or greater than your gross annual income. 1099 employees can deduct whatever they want. According to Investopedia, you will use Form 2106 for this deduction.

Business drives are classified by the IRS as:

  • Travel between offices (commutes can be counted if you have a home office)
  • Errands/supplies for the business *Business meals and entertainment (taking clients to lunch/golf/etc)
  • Airport/travel (drive to and from travel hubs like airports for business)
  • Temporary job sites (Driving from home to a temporary work location that you expect to last (and does, in fact, last) less than one year.)
  • Odd jobs (Drives to and from odd job locations, like babysitting, pet care, lawn work and more.)
  • Customer visits (Driving from office to customer homes/offices for consults or other business)
  • Job seeking (You may deduct the drives to find a new job. However, you cannot take this deduction if you’re looking for a job in a new industry for the first time.)

You must also determine what kind of deduction you want to take. You can either take the standard deduction as listed in the title, or deduct actual expenses, which covers gas and maintenance. If you take the standard deduction, you only have to record the miles you used for business/moving/charity/etc. If you take the deduction for actual costs, you must maintain all receipts and relevant logs for all charges made throughout the year.

Best guide on how to set up a mileage log and take the deduction without the IRS rejecting it is here on Investopedia).

Please correct if any of this information is wrong! I just found out about this today.

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Sorry, but unreimbursed employee expenses were eliminated in 2018...

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Original Poster1 point · 1 month ago

Well I feel stupid. Lmao

You need to create a budget and see where you're at.

Rent: $460 Utilities: $100 Groceries: $200 Gas: $200 Insurance: $150 Fun: $60 Total: $1,170

Income: $950

Defecit: $220

So where do we get this $220 per month back? Well, for starters: Why are you paying $200 a month in gas? I drive 30 miles to work 6 days a week and drive to class and spend at most $150 per month. Is ubering cheaper than driving yourself? Ask the ice skating rink to pay you for your work rather than giving you free skate time. You can't afford not to.

Insurance: What are you paying $150 in insurance for? Call your insurance company and see if you can get a lower rate or call and shop around for lower rates.

Groceries: Meal prep. Use coupons and sale codes to only ever buy food that's discounted.

It's not impossible to live off of what you're making but you need to be smarter about what you're doing.

1 point · 1 month ago · edited 1 month ago

Ok... what would you do? We have an emergency fund and other savings / investments / etc all in order so I'm bouncing this idea around...

Current situation we have a rather new truck that we owe roughly 26K on at 2.24% and we got a 48 month loan(I believe 34K was originally financed) with this. We had it appraised last night it's worth 32k, we could probably get a bit more if we go to an actual dealer to trade up. The current truck is going to have a recall issued on it soon and there is also a little noise that it has made since 500 miles that no one can seem to wrap their heads around to diagnose.

There is a promotion going on for 0% at 72 months. We could trade up and get the features that we really wanted from the get go but at the time didn't want to pay for it because we had two mortgages.

The second mortgage goes away today! Whew! We could in return take the profits from selling the other house and pay off the current truck... or we could trade it in and upgrade to the newer model with 0%... Since we already have our main house we aren't looking to move anytime soon. We might move in the next 5 years. Either way we already have enough saved to cover a down payment on that plus selling this current primary house... so I have no worries with a future move.

TL;DR -- selling our second house what should we do with the truck?

Use profits from selling house to pay off current truck loan at 2.24% and keep the vehicle you currently have.

Trade it up and get 0% for 72 months while then putting anything extra in a higher savings account or some other higher interest bearing account.

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Sell the second house and afterward trade in the truck and buy the one you want in CASH. There is no reason (imo) to take out a car loan if you have the funds available. Pay cash for the truck, reinvest the rest of the equity from the home and trade-in in ETFs, IRA/401k's, whatever you want, and make that money work for you.

There is no reason (imo) to take out a car loan if you have the funds available.

Would a reason not be that if you can take out a loan for 0% (ie costing you NOTHING) and instead of paying 30-40k cash right now, pay the 5-600/mo and put 80-90% of that cash you were going to buy the car with in investments and even if you put it in a simple savings account earning 2% interest, that's still 2% more money than you would have earned if you would have dumped all of it into (essentially) a 0% loan.

This is why in the "How to handle money" wiki/flowchart you payoff high interest loans first, then later down the line take care of any mid interest loans leaving low interest (~sub 3%) loans untouched because you can invest and make more than you're paying on the loan. In the case of having a 0% loan, even sticking it into a big bank savings earning .0001% interest, you are still coming out ahead...

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-1 points · 1 month ago

Because that 500-600/month is a recurring cost hindering cash flow. I don't understand why people are so willing to take out car loans for tens of thousands of dollars. That's five to six hundred dollars a month for the next SIX YEARS. If they pay off the car now, which they're able to do from the looks of it, that's $43,200 in positive cash flow over the same six years. They'll make their money back and more over the loan term rather than paying monthly on a depreciating asset.

so what's a reasonable/responsible way to play marijuana stocks? I don't have the stomach for $100 intraday moves. Is there an ETF?

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Hey everyone. Appreciate any useful insight!

I'm 21y/o making $25k annually before taxes. I've recently opened a Roth IRA with Vanguard in their Target Date 2060 Fund. I'm wanting to expand my portfolio out further for non-retirement specific investments, and I'm not sure how to branch out.

Obviously Vanguard is great for their low-cost mutual funds and ETF's, but I also want to try a little with buying actual stock. Vanguard's rates for doing so seem very high compared to other brokers like TD Ameritrade/E-Trade/CS/etc, so if buying individual stocks was where I wanted to go, would Vanguard be the best option?

Secondly, is it better to invest in mutual funds and index funds at this early stage or is there no real difference if I invested the extra cash in individual stock?

I'm sure these are basic questions but I appreciate the advice!

Until you get 500k+ in your account, Vanguard is a terrible option for individual stocks. Even their discounted trades are 50% more than Fidelity or Schwab, which offer similar index options. If you want to go with one of the big boys, I'd recommend Fidelity (what I use) or Schwab, at least for active stock picks. Nothing wrong with having a Vanguard account for indexes as well.

Commissions are instant, guaranteed negative return on your investments. If you're going to be investing small positions (<$500), a $5 commission is at least giving 1% to the broker that you can never get back. If you think you're going to be buying $500+ positions at a time, 1% isn't really a big deal. If you're going to be buying $50 positions, 10% is a HUGE deal.

If you do want small positions and are going to be active, I'd suggest Robinhood. It's far from perfect, you want gain interest on any cash left in your account, and you can't elect for dividends to automatically reinvest, but it offers trades without the commission. You might lose out on a small amount if they sell your order to a high frequency trader, but we're talking pennies. The savings on commissions easily dwarf the downside.

M1 finance offers fractional share trading and I believe is free, although I haven't used it. Based on others talking about it, it's geared towards constantly reinvesting into a preset portfolio allocation, but it might be able to provide what you need.

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Thanks for your detailed response!

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So, I just opened a Roth IRA account with Vanguard. I deposited about $500 in there and it looks like it needs to clear on their end before anything can be done with it. My main question is what do I do with the money? Will Vanguard let me put it into mutual funds or bonds or something else? Do I pick or do they pick for me?

I'm 21 right now so I won't be able to make the maximum contribution, but will be aiming for $2,400 annually until I can max it out (make $25,000 annually right now while in school). Any advice on where I should be putting the money investment-wise or what I should really be doing with it?

Looking really for any advice here, I want to maximize my annual returns as best as possible!

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Important thing to note: with $500, you won't have enough to meet the minimum initial purchases on Vanguard's mutual funds, so you'll have to buy a few shares of whichever ETFs you like (VTI, VXUS). Their target date funds have a minimum initial purchase of $1k, and most of their index funds have a minimum of $3k.

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Original Poster1 point · 2 months ago

Appreciate the heads up. I like the look of the Vanguard 2060 Fund, so I may just end up transferring some additional funds now that I have a better idea.

You will have to pick what investments you want.

I suggest the Vanguard Target Retirement 2060 Fund. It is a complete portfolio and requires no more input from you as it does all of the asset allocation and rebalancing for you.

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Original Poster1 point · 2 months ago

Interesting, thank you for the recommendation. I'll definitely be looking into that!

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A great service that I use is called Self Lender. You basically get a Certificate of Deposit put out in your name, make monthly payments towards the CD for 12 months, and the company reports your payments to all 3 credit bureaus monthly, AND you get the money you spent back at the end of the loan term. Basically a way that forces you to save a couple hundred bucks, helped my score out a lot (21 right now).

Be safe y'all. Trying to ride out a storm and ending up dead and sitting in traffic for a couple hours ain't the same.

Yup I'm convinced. I mean, I'm foolish, but I'm not THAT foolish. I'm running far far away. Kinda had to though. It's hard to find a room during a hurricane that allows pets. So I'll be driving to Atlanta with two angry cats.

Good times.

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Check out for AirBnB’s!!

Over 60 years of public service to our nation. Whether you're a Democrat or Republican, I think we can all safely come together and agree that this man served with dedication to the betterment of our nation. May he rest in peace.

There are few men in history that have given as much for their country as this man.

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Original Poster28 points · 2 months ago

Without a doubt. His politics aside, he dedicated his adult life - all of it - in service to the betterment of our country. Few men can say they've done the same.

Was at the game, team did a great job!

u/Volthian
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