Author Topic: What would you do in my situation?!?!  (Read 1774 times)

mcflaherty

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What would you do in my situation?!?!
« on: May 15, 2017, 05:43:13 AM »
I'm 25 years old. $20K sitting in savings, $1k in a checking account. I make $50k a year at a 9-5 job. My goal at work right now is to put systems into place so I can work remotely, even willing to take a paycut to make that happen, so I can work and travel the country in a van. I've got $20k in student loans, and that's the only debt I currently have. What would you do in my situation with the $20k that's sitting the savings account? I know there's much better things to do with it - so I'd love to hear your thoughts!

Note: I will be working with a financial advisor in the near future, but I want to hear from my like-minded Mustachians!

Linea_Norway

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Re: What would you do in my situation?!?!
« Reply #1 on: May 15, 2017, 05:46:53 AM »
Put it in a low cost index fund. That is the easiest way to invest for a non-specialist and the past has shown good profit over time. Money in a bank account when the rent is low is usually giving a profit lower than inflation, so that will lose money over time.

Fishindude

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Re: What would you do in my situation?!?!
« Reply #2 on: May 15, 2017, 07:04:37 AM »
Stay put, maximize your income and get those student loans paid off ASAP.   Soon as that is behind you, reward yourself with the road trip.

Filliteracy

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Re: What would you do in my situation?!?!
« Reply #3 on: May 15, 2017, 07:55:35 AM »
I'm 25 years old. $20K sitting in savings, $1k in a checking account. I make $50k a year at a 9-5 job. My goal at work right now is to put systems into place so I can work remotely, even willing to take a paycut to make that happen, so I can work and travel the country in a van. I've got $20k in student loans, and that's the only debt I currently have. What would you do in my situation with the $20k that's sitting the savings account? I know there's much better things to do with it - so I'd love to hear your thoughts!

Note: I will be working with a financial advisor in the near future, but I want to hear from my like-minded Mustachians!

What is the interest rate on your student loan? Generally, like-minded Mustachians will unequivocally tell you to pay off your debt because "your hair is on fire!!!". In your situation, I'd pay off the student loan completely with your savings, then re-save an amount sufficient to have fuck you money (probably back to 20K at least), then re-initiate your current plan of working remotely. You could probably save that within a year if working remotely is your priority.

oneday

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Re: What would you do in my situation?!?!
« Reply #4 on: May 15, 2017, 06:48:59 PM »
I wouldn't drain my cash on hand to $0, even to pay off interest-generating loans.  Personally I like to have at least 3 months expenses in a savings account, even though it's only 1% interest.  This is my "insurance plan" against having to withdraw from investments in a down market.  Plus it's my "sleep well at night" number for cash in the bank.  Lost of Mustachians will tell you there's no reason for it, but it's come in handy more than once.