Money Investing megathread extravaganza - Page 33

**DaFace** · 06:35 PM

A place to talk about investing stuff.

**DaneMcCloud** · 11-09-2016, 09:41 PM

Quote:

have been making 40-60 grand a year for about 12 years. I have no savings, no retirement (I started to build one at one point but cashed it in in an emergency)

About 20k in high interest debt, 30k in low interest debt, and owe about 78k on my house thats worth 85. (edit: recalculated, 22k in high interest, 17k in low interest with 12 of that at 0%)

Unfortunately at this new company I'm not vested for 6 years, but I will max. My 6 percent for the 3 they give.

I dunno really anything about any kind of IRA, no idea what a brokerage account is. I have kind of been living paycheck to paycheck and doing racecar shit :/

I am going to start researching investments as well, but I wont start investing until i get my 10k CC debt paid off, hopefully feb/march. My house is at 5.25 right now which is higher than I can get, but I wanted to finish the transition to the new job before I went in for a streamline refi at somewhere around 3.25.

I have A+ credit as well. Have been thinking about looking into some debt transfer options and turning some of that high interest debt into low interest debt, but dont know if thats worth any fees etc.

Okay. Trying to stay calm after reading this. Hometeam apparently has me on ignore, which is all good.

That said, I just don't understand the numbers. If I read them correctly, he's $50,000 in debt with $7k equity in his home.

How in the world could he have "A+" credit?

This is what led to the crash of 2008.

**DaFace** · 11-09-2016, 09:47 PM

Quote:

Originally Posted by DaneMcCloud

Okay. Trying to stay calm after reading this. Hometeam apparently has me on ignore, which is all good.

That said, I just don't understand the numbers. If I read them correctly, he's $50,000 in debt with $7k equity in his home.

How in the world could he have "A+" credit?

This is what led to the crash of 2008.

It's possible. Probably not the recommended situation of course. If you have a lot of credit and pay on time, though, you can have a pretty good credit score.

**DaneMcCloud** · 11-09-2016, 09:59 PM

Quote:

Originally Posted by DaFace

It's possible. Probably not the recommended situation of course. If you have a lot of credit and pay on time, though, you can have a pretty good credit score.

I can understand "pretty good" but from my understanding, A+ is 800 and over.

Again, I'm not trying to denigrate, just understand.

It seems like I don't understand the rules.

Mosbonian could explain this back in the old days but he rarely posts these days.

**Rain Man** · 11-09-2016, 10:05 PM

Quote:

Originally Posted by DaneMcCloud

I can understand "pretty good" but from my understanding, A+ is 800 and over.

Again, I'm not trying to denigrate, just understand.

It seems like I don't understand the rules.

Mosbonian could explain this back in the old days but he rarely posts these days.

My understanding is that a credit rating isn't about your net worth or your ability to pay so much as it is your actual history of paying. A person with debt who pays on it unerringly is perceived as a very positive risk, even better than a person without debt who doesn't have a record of unerring payment.

**DaneMcCloud** · 11-09-2016, 10:11 PM

Quote:

Originally Posted by Rain Man

My understanding is that a credit rating isn't about your net worth or your ability to pay so much as it is your actual history of paying. A person with debt who pays on it unerringly is perceived as a very positive risk, even better than a person without debt who doesn't have a record of unerring payment.

I find that to incredibly financially irresponsible and scary.

**DaFace** · 11-09-2016, 10:14 PM

Quote:

Originally Posted by DaneMcCloud

I find that to incredibly financially irresponsible and scary.

I suppose that's true in a way, but credit scores are meant to help banks know how much risk they'll be taking that you won't pay them back. It has nothing to do with whether it's a financially-responsible decision for you to hold additional credit.

Cornstock · 11-09-2016, 10:23 PM

Quote:

Originally Posted by Rain Man

My understanding is that a credit rating isn't about your net worth or your ability to pay so much as it is your actual history of paying. A person with debt who pays on it unerringly is perceived as a very positive risk, even better than a person without debt who doesn't have a record of unerring payment.

Agreed, history to repay, but additionally, your profitability to banks. Explains why so many old guys' credit score drops from 825 to 798 when they have their house paid off, even though they are making more money than they ever have, and have never missed a payment in their life.

They aren't being as profitable to a bank, so their score drops

**DaneMcCloud** · 11-09-2016, 10:24 PM

Quote:

Originally Posted by DaFace

I suppose that's true in a way, but credit scores are meant to help banks know how much risk they'll be taking that you won't pay them back. It has nothing to do with whether it's a financially-responsible decision for you to hold additional credit.

The bottom line for me is that if I was earning $60k a year but $50k in debt with CC companies with 20% interest, I'd be freaking out and probably unable to sleep.

**DaFace** · 11-09-2016, 10:27 PM

Quote:

Originally Posted by DaneMcCloud

The bottom line for me is that if I was earning $60k a year but $50k in debt with CC companies with 20% interest, I'd be freaking out and probably unable to sleep.

Agreed.

**SAUTO** · 11-09-2016, 11:08 PM

Quote:

Originally Posted by hometeam

Dont think im not dreamin!

Gonna be cool and get my shit handled first.

That's a very good idea.

Demonpenz · 11-10-2016, 12:51 AM

I had like an 820 credit score when I bought a car and I am a dumbass.

Amnorix · 11-10-2016, 08:23 AM

Quote:

Originally Posted by Rain Man

My understanding is that a credit rating isn't about your net worth or your ability to pay so much as it is your actual history of paying. A person with debt who pays on it unerringly is perceived as a very positive risk, even better than a person without debt who doesn't have a record of unerring payment.

This. And, to carry it one step further, the bank or other lender will look at your "balance sheet" overall to determine whether ot make the loan. Your credit score is only one indicator, primarily around "reliability". Even with 800+ he couldn't/shouldn't be able to buy a $1 million house on $50k of income or whatever.

Amnorix · 11-10-2016, 08:34 AM

Quote:

Originally Posted by hometeam

I have been making 40-60 grand a year for about 12 years. I have no savings, no retirement (I started to build one at one point but cashed it in in an emergency)

About 20k in high interest debt, 30k in low interest debt, and owe about 78k on my house thats worth 85. (edit: recalculated, 22k in high interest, 17k in low interest with 12 of that at 0%)

Unfortunately at this new company I'm not vested for 6 years, but I will max. My 6 percent for the 3 they give.

I dunno really anything about any kind of IRA, no idea what a brokerage account is. I have kind of been living paycheck to paycheck and doing racecar shit :/

I am going to start researching investments as well, but I wont start investing until i get my 10k CC debt paid off, hopefully feb/march. My house is at 5.25 right now which is higher than I can get, but I wanted to finish the transition to the new job before I went in for a streamline refi at somewhere around 3.25.

DaFace's post says it all in terms of the priority list. Get that CC paid off asap.

Once you pay off the CC and have started the matching 401(k), etc. what you would REALLY like to do is refinance the house and NOT pay PMI. This requires that you have paid down 20% of the house based on valuation. PMI is money out of your pocket solely for the benefit of the bank and is COMPLETELY BAD.

Here are your numbers:

Quote:

owe about 78k on my house thats worth 85

So, what you're looking to do is (1) be certain it's worth $85K, and (2) cobble together $17K so you can refinance to get a loan for $68K at a LOWER interest rate and NO PMI.

That will save you quite alot every month. Based on your numbers, you already have $7K of that $17K, so you need $10K more to make it happen.

Amnorix · 11-10-2016, 08:42 AM

Quote:

Originally Posted by DaneMcCloud

The bottom line for me is that if I was earning $60k a year but $50k in debt with CC companies with 20% interest, I'd be freaking out and probably unable to sleep.

I'm not kidding when I tell you that some disturbingly HUGE percentage of America is basically in this boat, which is a huge part of why people are so disaffected and voted for "Hope and Change" in 2008 and for Trump in 2016.

MEDIAN savings (half of population above, half below) for people aged 56-61 is $17,000. SEVENTEEN thousand. It's ****ing mind-boggling.

Quote:

Nearly half of American families have no retirement account savings at all.

Quote:

Whereas the average savings of a family with members in the 32-to-37 age range is $31,644, the median savings is a bleak $480. At the other end, the average savings of families 56 to 61 — those nearest to retirement — is $163,557. The median is $17,000.

http://www.businessinsider.com/how-m...irement-2016-3

**mikeyis4dcats.** · 11-10-2016, 09:27 AM

google reddit personal finance and sign up

06-27-2016, 11:23 AM
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11-10-2016, 12:51 AM	#491
Demonpenz Woman should only make babies Join Date: Nov 2003 Location: Apartment "G UNIT!" Casino cash: $2992136	I had like an 820 credit score when I bought a car and I am a dumbass. __________________
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11-10-2016, 09:27 AM	#495
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