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money advice?

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through the last 7 years, i've been struggling with getting back on my feet. I was almost homeless at some point, I relied on those cash advance places, bottomed out my cookie jar (literally, thank you coinstar!) and sat in my house with the power cut. I was struggling with my budget, my pay and my financial obligations.


I decided I'll work on my finances, finally. And a few months ago, i was able to balance out my budget, maintain payments and somewhat live a better financial life. I got a job that's NOT too high paying but also enough for one to live alone in one of the most beautiful cities in the world. Now, I want more.


I've heard people say "let your money work for you" or hear my friends investing or buying stocks etc. and I'm never quite sure how to increase my income and do with my money now that I've started to get back up from financial problems. I've still got a substantial debt to pay, but now, i'm not overdrafting my accounts, incurring late fees (i slip up once in a while!) or being threatened by garnishment (i went through that too!)


Where should i start? i don't no CD's, money markets, FICO's and all these terms. I want to hear/ see what i can do now that i'm a bit inspired and more responsible with my money... any suggestions?

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Look in to purchasing a financial health book. You should absolutely not invest until all your other finances are in order. No overdrafting, enough coming in to pay debts, and some savings built up.


Do not invest anything until you have 3-4 months of income saved up.


After that, modify your budget so that you have your expenses paid, some to savings, and some to investing. Investing is not cheap. It's usually about $10 a trade, so I usually recommend having an investing lump sum, like $500+, to make that investment cost worthwhile.


In finance they talk about diversification. As a single investor, diversification is not easy. At $10 a purchase, you would have to load up on a lot of different stocks in small amounts to diversify. For that reason, I am a fan of ETFs (exchange traded funds). When you decide to invest, research ETFs and find one that is diverse - i.e., an S&P500 ETF. A housing market ETF, for instance, is less diversified because it's all one market. Then plan to let your money sit for the long term (>1 year). It's worthwhile to have a "trailing stop loss" on your stock. When you invest, look in to these.


ALSO! Absolutely 100% start a 401k or an IRA (individual retirement account). Regardless of age, you need to start saving now.

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Pay of your interest debt, that is the smarted investment right now. Get a second job.

I've still got a substantial debt to pay, but now, i'm not overdrafting my accounts, incurring late fees (i slip up once in a while!) or being threatened by garnishment (i went through that too!)
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It took me about 11 years of working before I was able to be in a position to invest. Unless you've got a job that matches your contribution, I'd say to hold off on investing if you're still getting back on your feet. As mustlovedogs mentions, having a buffer will increase your quality of life (less worry) much more than a stock purchase.


Also, never in my life would I put money into a CD, or invest in anything that's not completely liquid for that matter. You'd be better off with high dividend yield, stable stocks. But, again, that's for the future.

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Dave Ramsey! lol I'm a big fan. Check out his podcast and read the book the total Money Makeover. Basically you want to pay off all your debt before you even consider investing.


He has easy to follow baby steps to help you achieve your financial goals and become debt free. Investing while you have debt is not smart. Spend all your extra money and energy on paying off that debt. Think about life with NO payments. You'd have so much extra money. It's a more realistic way to increase your income instead of hoping to strike it rich via investing.


Good luck. I'm just starting my journey to being debt free. It feels good to be in control.

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Bottom line: don't gamble. There are no get-rich-quick schemes.


Pay attention to the APY of various investment instruments. A CD or a money market account is not bad. They are low-risk investments, no matter what. When the interest rates are in your favor you can make good money. Before 2007, the APYs were in the 5s and I made some sweet money off of CDs and money market accounts. However, the interest rates have tanked since then, so it's not so lucrative.


Educate yourself.

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There should be an adviser at your bank who can help you. Pay off your debt asap and learn ways to save and invest your money safely so it will grow for you. Dont gamble.


Be wary of advisors. To be honest, I (ironically) think you should only see one after you've educated yourself on financial tools. They can try and sell you on things you don't need.


That being said - if you meet an advisor that doesn't push any programs or fee based services and just provides general advice, that's great. But be wary of any advisor that pushes something.

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