Author Topic: $3,4000 stimulus: HELOC or Investments?  (Read 668 times)

maxpower

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$3,4000 stimulus: HELOC or Investments?
« on: April 15, 2020, 05:41:12 AM »
Stimulus check just hit our account. I am trying to decide whether I should throw the whole thing into investments, or pay down my HELOC. We have about 34,000 on our HELOC (built a garage/studio) at 3.9%. We can pay down between 1,000 and 1,500 per month. Six of one, half dozen of the other? Or is there an obvious choice here? Iím leaning investments.

celerystalks

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Re: $3,4000 stimulus: HELOC or Investments?
« Reply #1 on: April 15, 2020, 06:09:03 AM »
How secure are your jobs?

If there is a possibility that you could wind up unemployed in a downturn, perhaps just let the money sit in the bank account so you could live off of it for a while.

Car Jack

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Re: $3,4000 stimulus: HELOC or Investments?
« Reply #2 on: April 15, 2020, 07:27:05 AM »
<Dave Ramsey> Pay down all debts first, son!  </Dave Ramsey>


It's also what I would do.

talltexan

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Re: $3,4000 stimulus: HELOC or Investments?
« Reply #3 on: April 15, 2020, 10:50:35 AM »
That money is being sent to you to try to save the economy. Try to find ways to use it to keep local businesses around you running and people around you safe and secure.

magnet18

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Re: $3,4000 stimulus: HELOC or Investments?
« Reply #4 on: April 15, 2020, 11:08:32 AM »
That money is being sent to you to try to save the economy. Try to find ways to use it to keep local businesses around you running and people around you safe and secure.

Spend it all on takeout sushi!

More seriously, mine will pad the emergency fund.  When things are more secure it'll go towards debt pay down

bonesmtb2

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Re: $3,4000 stimulus: HELOC or Investments?
« Reply #5 on: April 15, 2020, 11:13:42 AM »
I also got $3400.  Very torn how much to donate to local charities to help those actually impacted, climate change causes, and how much to invest to get me closer to FI.
I am working from home, and my family has not been affected at all financially, other then investment accounts losing value.

Retire-Canada

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Re: $3,4000 stimulus: HELOC or Investments?
« Reply #6 on: April 15, 2020, 05:35:25 PM »
Stimulus check just hit our account. I am trying to decide whether I should throw the whole thing into investments, or pay down my HELOC. We have about 34,000 on our HELOC (built a garage/studio) at 3.9%. We can pay down between 1,000 and 1,500 per month. Six of one, half dozen of the other? Or is there an obvious choice here? Iím leaning investments.

The answer depends on a lot of information not provided in your brief post above. I have a LOC [not based on home equity] I'm not using any $$ from it to invest at the moment. I'd rather have it available should something unexpected happen and a need some liquidity fast. I normally don't have a cash EF, but I am building one and basically any extra cash I have at the end of the month 50% is going towards the EF until I hit 6 months spending saved the other 50% is going towards investments.

If I had $34K on my LOC I'd pay down the max each month and invest the rest. Once I got to the end of the LOC debt I'd build that cash EF by saving 50% and investing 50% of my excess income each month. Once I had paid off my LOC debt and built the 6 month cash EF I'd invest 100% of the extra income. I like the idea of investing while stocks are cheaper, but I wouldn't want any non-mortgage debt and I keen on some cash at the moment since my income is variable and could be interrupted.

YMMV, but it's hard to provide specific advice without more information.