It’s the first Monday of the month (and the year!), and I’m kicking off 2017 with answers to your questions.
Our first question comes from Ashley. She’s a single mom setting aside $150-$200 per month in a savings account for her two-year-old son.
She realizes this money could grow faster elsewhere … but where should she invest it? College 529 plans are too restrictive, Ashley says, and she’s reluctant to open a brokerage account in his name. What other alternatives are there?
Ashley asks a second question, as well. She’s determined to crush her mortgage ($62,000) and obliterate her student loans ($52,000). And she has an extreme idea: moving in with mom.
Ashley could move in with her mother, rent out her home, and collect a nice spread. She’d use this additional income to pay down her debts. Is this a smart idea?
Our next two questions come from Vanessa.
Vanessa is tackling her student loan and credit card debts. She’s wondering if she should close out her credit cards due to their horrible interest rates. But she’s had these credit cards since college — won’t closing these affect her credit score?
Cut ’em up? Keep ’em? What should Vanessa do?
Vanessa’s next question is about her (eventual) demise.
Vanessa’s nieces and nephews are her beneficiaries. What might happen if they inherit her IRA? What are the tax consequences? What red flags should they stay alert for?
Julie asks the next question:
She and her husband are 20-25 years away from retirement. They save money and invest the balance quarterly. These new contributions are meant to rebalance their portfolio.
This quarter, Julie notices that European equities are much cheaper than US equities (due to the recent turmoil). She wants to scoop up a bunch of European equities while they’re cheap. Should she?
Is this smart value investing? Or is this another ill-fated attempt to time the market?
Nicholas asks the next question. He and his wife make too much to contribute to a Roth IRA. Should they make a backdoor Roth conversion?
Melissa from Colorado asks the final question in today’s episode. She’d like to replace her salary with investment income ASAP. But how?
Should she invest in her 403(b) account? Prioritize her Roth IRA? Crush the mortgages on her two rental properties? Save for a downpayment on a third rental property? How can she fast-track her financial independence?
I tackle these questions on today’s episode. Enjoy!
- How to Hack Your Credit Score
- One Percent Rule
- Rules for Inherited IRAs (PDF)
- Roth IRA Conversions
- How to Calculate Cap Rate
P.S. On the first Monday of the month, I answer your questions about money, entrepreneurship, investing, and anything else you throw my way. Got a question? Leave a voicemail here.
I also want to take a moment to thank the sponsors for this episode.
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