P2P investing on a teacher's salary?

[kmb501]

Hi again.

Well, I took steps to start saving money. One, I deleted the link between my bank account and my debit card. Now, I have to go directly to the branch to add money to my card. Two, I started using an app my bank provided to help me track my spending. I can't say I've saved much this month because I had a car repair to take care of, but at least I now know where my money is going, and I can make suitable adjustments. I'm also on the Income Based Repayment Plan, so my student loans are set to be forgiven eventually. (I know some of you said this was not a good option, but  my loans are not in deferral. I'm making required payments, and I can even go back to school if I want to, as long as I opt out of deferring my loans.)

Now, I'm thinking about investing money while I can instead of just saving it and thinking of things to spend it on.

I've seen a few good options. One. my employer offers a 401K plan; I would like to take advantage of it, but I'm confused. If I lose my job, does the 401K plan stay with me, will I lose the money I invested, or will the money I invested be refunded? 

I've also seen P2P lending and read the MMM article on the subject, but my income isn't high enough to invest in this; is it? I was under the impression that I needed a minimum gross income of $70,000. My gross annual income is only about $30,000. I know P2Ps can be risky, and I don't really want to invest that much. I was thinking about just throwing my tax return money at it and seeing if it would do anything, but I read you had to at least invest $2000; even that's too much for me to gamble with.

I'm also thinking about joining a credit union to see if I can find better savings plans and returns.

[Choices]

The first step is to pay off debt. Do you have any besides your student loans? If you've chosen to only pay the minimums there (there are pros and cons to this that it sounds like you've already considered), then invest.

If you have an employer match, start with your 401K. If you leave the company, you can roll it to a personal IRA anywhere you want (Vanguard, Fidelity, etc.) and the company where you open your IRA can help you.

If you don't have an employer match, start with a Roth IRA. Your investment gains will be tax-free.

[MrStash2000]

You probably have access to both a 403b and 457. This is BASED and the 457 should be your #1 priority.

You can defer up to max up to 36K in both. Not many professions have this opportunity.

Do your homework. Rule One: If you have a choice on where the funds go choose Vanguard.

[kmb501]

Thank you. I guess I will look into that.

[redcedar]

Income based limits seem, to me at least, to be there since income is something that everyone understands. However, these limits should be net worth based since it really is your ability to absorb a significant loss of which income is a terrible indicator.

I second the advice on focusing on tax deferred savings. If you have access to a 457 and the fees are very similar to a 403 that you may also have access to, jump over to millionaireeducator.com and read about his use of this type of plan. He has not only maxed it but has also used a few job changes to gain early access to the money for either income or just simply to transfer the money to a vanguard/fidelity/schwab/lowcost IRA which nearly eliminates the 457s one difference/risk compared to other tax deferred options.