Author Topic: when do I start to invest?  (Read 959 times)

mporter012

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when do I start to invest?
« on: June 04, 2017, 08:48:18 AM »
This is a follow-up to my post from a few months ago, entitled "living simply, still broke."

The high/low is that I was, at the time, inquiring about a budget for my then job -managing a farm in ny state. At the time I was receiving a monthly salary of $2000/month with free housing and some board.

That job has sense ended, because I decided, fwiw, to take a job as a carrier with the USPS, while I sort out my next move. The job is pretty brutal - the atmosphere is very cynical and negative - so much so, that it would seem unhealthy for a young, optimistic guy to spend much time here. I can already feel myself being affected by it -  but it's easy enough and the money in good enough, and I can transfer wherever I want, that I decided to take it. So my wages are about the same as before, but when I get OT, which is most weeks, I can jump up to $2500-$3000K/month. It's still shitty, but If I'd stay until November, I'd also get a check for the new contract, which will be retroactively paid to us - that will be something like $2/hr, putting me at about $18/hr.

Anyway, my question is this: I still have some credit card debts that I'm finishing paying, as well as some other short term personal debt, so when should I begin to think about investing in some Index Funds? Do I wait until ALL the credit card debt is paid for?? Should I begin investing once I get the credit cards paid off AND the student loans? I'm a bit confused on this.

Thanks folks!






tawyer

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WildJager

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Re: when do I start to invest?
« Reply #2 on: June 04, 2017, 12:35:29 PM »
In simple terms, look at the interest rates you're paying vs your anticipated investment return.  If you anticipate making 5% returns in the market, pay all debt first that is over 5%.  The hard part is anticipation what return you'll get from the market.  Most can agree that you'll beat 3% though, which is why many are willing to keep a mortgage and invest the extra cash.  Most credit cards have a higher interest than average market returns, so it's advisable to pay them off first.