"SHOW ME THE MONEY" VIEWS on HOW to make MONEY GR

[Patler]

There aren't a lot of decisions to make in his situation.

When it comes to personal finance, this is very often the case. The first 4 or 5 moves are typically "no brainers". You don't get into the high degree of difficulty stuff until after you've taken advantage of the easy no brainers. Unfortunately, most people haven't yet mastered the easy stuff. I think you can make a pretty strong case that all you ever really have to do is master the easy stuff. Do that, and you'll end up wealthy enough in the vast majority of situations.

Agreed, but for most there are at least some that require some sort of balance:
"Do I rent a little nicer apartment in a better area, or pay more on my student loans?"
"Do I nurse the old rust bucket with inevitable repair bills, or get a different used car?"
"Do I pay extra on debt with a smaller IRA contribution, or max the IRA?"
"Do I buy porterhouse or flank steak?"
"Do I buy a fancy microbrew, or Budweiser?

The simply fact is Partial does not even have 4 or 5 of those no brainers you mentioned. He can meet or exceed his two no brainers very easily without financial discomfort.

[mraynrand]

I guess my point was that he'll be just fine. My own deep thoughts on personal finance at his age were pretty much confined to "How much beer can I get for $7?"

The extent of advice I got at his age was "people don't plan to fail, they fail to plan." But at that point, I was getting about a 15K stipend and my planning consisted of how many days I could string out a tuna casserole.

[Patler]

Sometimes my "old goatedness" makes me a bit gruff with those who have very simple situations!

I've noticed that you can be a little prickly. You should try being more nurturing like me.

I'm trying, I'm trying!

[Scott Campbell]

There aren't a lot of decisions to make in his situation.

When it comes to personal finance, this is very often the case. The first 4 or 5 moves are typically "no brainers". You don't get into the high degree of difficulty stuff until after you've taken advantage of the easy no brainers. Unfortunately, most people haven't yet mastered the easy stuff. I think you can make a pretty strong case that all you ever really have to do is master the easy stuff. Do that, and you'll end up wealthy enough in the vast majority of situations.

Agreed, but for most there are at least some that require some sort of balance:
"Do I rent a little nicer apartment in a better area, or pay more on my student loans?"
"Do I nurse the old rust bucket with inevitable repair bills, or get a different used car?"
"Do I pay extra on debt with a smaller IRA contribution, or max the IRA?"
"Do I buy porterhouse or flank steak?"
"Do I buy a fancy microbrew, or Budweiser?

The simply fact is Partial does not even have 4 or 5 of those no brainers you mentioned. He can meet or exceed his two no brainers very easily without financial discomfort.

Also agreed. In terms of critical success factors, I think were talking 1 part math to 100 parts discipline.

[Patler]

I guess my point was that he'll be just fine. My own deep thoughts on personal finance at his age were pretty much confined to "How much beer can I get for $7?"

The extent of advice I got at his age was "people don't plan to fail, they fail to plan." But at that point, I was getting about a 15K stipend and my planning consisted of how many days I could string out a tuna casserole.

During grad school our planning was around tomato soup at $.10/can with rice added for bulk, or macaroni and chess at about $.10/box. I hate tuna!

We had a very dear neighbor whom I will never forget. They usually ate early, before we would get home in the evenings. She routinely showed up at our door with the rest of a pan of this or a pot of that "because her husband and kids hated leftovers, and she would have to throw it out anyway." But we knew her real motive, and we tried to repay them with any help we could ever provide. I think of her very often.

[Scott Campbell]

But we knew her real motive, and we tried to repay them with any help we could ever provide. I think of her very often.

Ahhh yes - memories.

I have a similar story - only it wasn't pot roast that she brought over.

[mraynrand]

But we knew her real motive, and we tried to repay them with any help we could ever provide. I think of her very often.

Ahhh yes - memories.

I have a similar story - only it wasn't pot roast that she brought over.

I have to admit - a similar thought crossed my mind, but I let it go. Leave it to SC to pull the trigger - so to speak!

BTW, completely OT - who was more pathetic - Dustin Hoffman in The Graduate or Charles Grodin in The Heartbreak Kid? I have to give Grodin some slack, because if you have a chance at Cybil Shepherd, it would be hard to say no. I should point out that the all-time most pathetic character ever was played by Charles Grodin in 'The Lonely Guy.' I recall this line where Grodin's character is saying that he doesn't like to take naps because every time he wakes up there is that shock of realization of who and what he is and that he can't take that more than once a day. PAINFUL!

OK, back to your regularly scheduled program with Clark Howard.

[Patler]

But we knew her real motive, and we tried to repay them with any help we could ever provide. I think of her very often.

Ahhh yes - memories.

I have a similar story - only it wasn't pot roast that she brought over.

Gee, thanks for spoiling the memory of a very helpful and considerate neighbor! Given an option, I would have taken the pot roast in my situation; and not just because my wife would have insisted on it!

[Freak Out]

Alright Gents, I have some questions on how a 23 year old (24 in August) should handle their money.

I've got an income of 57k before taxes as a W-2 employee.

I have 14k in debt. I have 2.5k in the bank.

My living situation is free of charge.

I will have about 500 a month in fixed expenses every month. This includes food, health insurance, living situation (I'm squatting free of charge), gas, etc.

My parents want me to get outta debt asap so they're covering my cell phone and car insurance.

With that said, how would you guys go about attacking this to maximize the earnings?

RG, Bretsky, Freakout, etc, any thoughts?

What's the interest on the debt? I'm sure you stated it somewhere but I'm late to this game...sorry.

You're living in the basement, with that income and you still have that debt...wtf man? Plus the folks are paying for cell and car insurance? 1st....you are a spoiled brat! You should stop taking their money for cell and such...free rent is good enough...and you still should easily be able to pay off that debt in a year. Once that is done you can focus on investing some in real estate or the markets.

[Bretsky]

OOPS; Sorry Partial........just saw this.

OK, my answer will support much of what's posted here but seeing as all I seem to be doing is witnessing serious high interest debt lately there may be a few twists.

1. List your debts in order of the highest interest debt to the lowest interest debt

2. Buy a cheap dayplanner

3. Write down your goals for this year and hold youself to them, At bare minimal I think you should have quarterly, semi annual, and annual goals for the next twelve months. Get use to committing yourself to something financially and make it happen.

4. As for what the goals entail. Get rid of the debt. Start with the highest interest crap first. Pay minimal payments on the lowest interest and start knocking off the higher interest debts one by one like Favre use to knock of the Chicago Bears with victories back in the old days

5. If your employer contrubutes to your 401K, put in the minimal that would allow you to get the maximum free $$ from your employer.

5. Start a ROTH IRA today; start one that does not require a huge amount of funds to open. Have $100 a month automatically taken out of your savings accout to go into the ROTH. You won't miss it. This becomes habit. We are creatures of habit; the earlier you start the better. If this delays your full debt getting paid off a month or two, Bretsky doesn't give a rats ass. Start the lifelong process of getting yourself ahead

[Partial]

When making a preliminary budget a few weeks back, I could pay down 400 bucks of debt a week and put the 79 bucks a week into the roth to reach 4k by the end of the year.

RG, any reason that I shouldn't do this? Especially given that there is likely a lot of money to be made in the next year in stocks.

[Bretsky]

When making a preliminary budget a few weeks back, I could pay down 400 bucks of debt a week and put the 79 bucks a week into the roth to reach 4k by the end of the year.

RG, any reason that I shouldn't do this? Especially given that there is likely a lot of money to be made in the next year in stocks.

RG is more about paying off the debt first

I take a combo approach and think the Market offers an oppurtune time for the long termer.

[retailguy]

When making a preliminary budget a few weeks back, I could pay down 400 bucks of debt a week and put the 79 bucks a week into the roth to reach 4k by the end of the year.

RG, any reason that I shouldn't do this? Especially given that there is likely a lot of money to be made in the next year in stocks.

Partial - if you applied the 79 bucks to the debt, and then, when the debt was paid off, you applied the entire 479 to the Roth, you'd end up in the same place, at the same time.

You have enough income that you can fully fund the Roth by April 2010 AND pay off the debt.

Bretsky is right. I hate debt. ALL DEBT. I don't believe that there is any "good debt".

Get rid of it as fast as you can.

[Scott Campbell]

Bretsky is right. I hate debt. ALL DEBT. I don't believe that there is any "good debt".

Get rid of it as fast as you can.

I'll disagree with that one. Debt may be bad, but there are varying degrees of bad. If you borrow to fund consumption, that 's really bad. If you borrow to fund investment, that's not nearly so bad. The real problem with debt is that most people misuse it.

[retailguy]

Bretsky is right. I hate debt. ALL DEBT. I don't believe that there is any "good debt".

Get rid of it as fast as you can.

I'll disagree with that one. Debt may be bad, but there are varying degrees of bad. If you borrow to fund consumption, that 's really bad. If you borrow to fund investment, that's not nearly so bad. The real problem with debt is that most people misuse it.

Your point ignores risk. Debt creates risk. Sometimes the risk pays off, and as many Americans have recently found out, sometimes even "safe" risk doesn't pay off.