thebiglebowski Posted January 29, 2013 Share Posted January 29, 2013 I dunno, but the thought is good. Tuck $300 away into a retirement account, save $5k. No one can argue with that logic. But it's definitely a topic that requires a professional opinion. Quote Link to comment Share on other sites More sharing options...
themean Posted January 30, 2013 Share Posted January 30, 2013 Do you think that your bretheren involved in things like robosigning and overvaluing loans in the secondary market should be in prison? Quote Link to comment Share on other sites More sharing options...
IanRees Posted January 30, 2013 Share Posted January 30, 2013 whats the best way to tell Sallie Mae to go to hell? GradedOnACurve 1 Quote Link to comment Share on other sites More sharing options...
thebiglebowski Posted January 30, 2013 Share Posted January 30, 2013 whats the best way to tell Sallie Mae to go to hell? Can't do it. The borrower can take back a house, a car, a boat. They can't take your education out of your head and return it to the university. Quote Link to comment Share on other sites More sharing options...
pushbacktosquare Posted January 30, 2013 Share Posted January 30, 2013 2 Different Scenarios coming at you: Say someone has a Student Credit Card with a limit of 500 bucks. The student owes $470 bucks to the card. Would it benefit him to pay off the card in monthly payments (of course, making payments a little above the minimum) or if he can, pay it all in full in one month? Does if effect / build the credit score the same? Or does it make a difference Also, let's say that same student that has that $470 debt has been making his monthly payments on time, but every month he wastes what his monthly payment is. So for instance, his Minimum payment if 40 bucks a month. He pays 50 bucks on time. But then, he turns around and spends 50 bucks that same month, bringing back his total balance to $470. Does that take a negative toll on his credit score even though he is technically making all of his payments on time? Quote Link to comment Share on other sites More sharing options...
thebiglebowski Posted January 30, 2013 Share Posted January 30, 2013 Do you think that your bretheren involved in things like robosigning and overvaluing loans in the secondary market should be in prison? Should probably start with Bill Clinton and George W. Bush if that's the case. Quote Link to comment Share on other sites More sharing options...
thebiglebowski Posted January 30, 2013 Share Posted January 30, 2013 2 Different Scenarios coming at you: Say someone has a Student Credit Card with a limit of 500 bucks. The student owes $470 bucks to the card. Would it benefit him to pay off the card in monthly payments (of course, making payments a little above the minimum) or if he can, pay it all in full in one month? Does if effect / build the credit score the same? Or does it make a difference Also, let's say that same student that has that $470 debt has been making his monthly payments on time, but every month he wastes what his monthly payment is. So for instance, his Minimum payment if 40 bucks a month. He pays 50 bucks on time. But then, he turns around and spends 50 bucks that same month, bringing back his total balance to $470. Does that take a negative toll on his credit score even though he is technically making all of his payments on time? This has already been covered in this thread. Pay it off as quick as possible. Use it a little bit each month, and pay it off before incurring interest. Carrying a balance does not help your credit history and it hurts your debt / credit ratio, a part of the score. You want to have a long history if possible (so keep using it) but everyone's goal #1 in finance should be to get rid of all bad interest payments (probably rates over 6% and definitely anything over 10%). Quote Link to comment Share on other sites More sharing options...
dreamover Posted January 30, 2013 Author Share Posted January 30, 2013 2 Different Scenarios coming at you: Say someone has a Student Credit Card with a limit of 500 bucks. The student owes $470 bucks to the card. Would it benefit him to pay off the card in monthly payments (of course, making payments a little above the minimum) or if he can, pay it all in full in one month? Does if effect / build the credit score the same? Or does it make a difference Also, let's say that same student that has that $470 debt has been making his monthly payments on time, but every month he wastes what his monthly payment is. So for instance, his Minimum payment if 40 bucks a month. He pays 50 bucks on time. But then, he turns around and spends 50 bucks that same month, bringing back his total balance to $470. Does that take a negative toll on his credit score even though he is technically making all of his payments on time? 1. the best thing this person could do (if possible) is to pay it off in full and use the card for little purchases every month and pay it off every month, on time. 2. it's not the paying it and reusing it that effect credit score as much as available credit effect credit score. if you have $300 open on your card, it will more positively effect the score than say having $20 available. Quote Link to comment Share on other sites More sharing options...
somethingvinyl Posted January 30, 2013 Share Posted January 30, 2013 Good thread.I remember hearing something, please advise... I heard that if you start putting 2K into a roth IRA annually at the age of 30, because of compound interest, by the time you're 50, it will eventually gross 1 million. Any truth to this or are the numbers way off? Quote Link to comment Share on other sites More sharing options...
chiefwahoo Posted January 30, 2013 Share Posted January 30, 2013 Good thread. I remember hearing something, please advise... I heard that if you start putting 2K into a roth IRA annually at the age of 30, because of compound interest, by the time you're 50, it will eventually gross 1 million. Any truth to this or are the numbers way off? Way off. You can Google the calculators for this kind of stuff, they're all over the internet and easy to use. Quote Link to comment Share on other sites More sharing options...
One Hundred Fifty-Two Posted January 30, 2013 Share Posted January 30, 2013 Good thread. I remember hearing something, please advise... I heard that if you start putting 2K into a roth IRA annually at the age of 30, because of compound interest, by the time you're 50, it will eventually gross 1 million. Any truth to this or are the numbers way off? You would be closer by saying 20K Quote Link to comment Share on other sites More sharing options...
thebiglebowski Posted January 30, 2013 Share Posted January 30, 2013 All IRAs don't perform equally well. You choose the equities to invest in (stocks, bonds, gold (I think?)). Assume you do well and can make 10% each year, which is doing pretty good. Excluding any fees or anything like that, 2K (untaxed) every year for 20 years at the beginning of the year at 10% will be worth about $140k. If you change the rate to 8% (ie, take off 2% each year lost to inflation) then it is worth about $109k (adjusted for inflation). So you put in $60k, you get about double that. $2k per year just isn't enough to end up with a mil. Save $2k from when you are 20 until 50 and you have over $250k. Or if you want to save for 20 years at 10% and end up with a mill you have to tuck away more like $15k a year. Quote Link to comment Share on other sites More sharing options...
somethingvinyl Posted January 30, 2013 Share Posted January 30, 2013 Hmm... good to know. Something I've heard, always curious about. Quote Link to comment Share on other sites More sharing options...
hipsterasfolk Posted January 30, 2013 Share Posted January 30, 2013 Will annual contribution of $2k + whatever your employer matches you guys should just slang yay on the streets! 50 Cent bought a Benz in like 30mins of becoming an upcoming thug in Get Rich or Die Tryin' Real estate is also a good investment at the time, along with racing horses (if you fancy that stuff.) Quote Link to comment Share on other sites More sharing options...
thebiglebowski Posted January 30, 2013 Share Posted January 30, 2013 Hmm... good to know. Something I've heard, always curious about. The general sentiment is sound -- consistent small to medium sized investments starting at a young age lead to a nice retirement nest egg in 30 years. 2k -> 1 mill is just someone not understanding the math and grossly exaggerating the effect. Another way to "get ahead" is to never buy or lease a new car, which should free up some good money to save. Quote Link to comment Share on other sites More sharing options...
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