Comments on: What Would You Do With $10,000? http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/ A personal finance blog dedicated to discussing such topics as budgeting, asset allocation, 401K, IRA, cash flow, insurance, financial planning, portfolio management, and other areas in personal finance. Fri, 20 Nov 2009 19:56:44 -0800 http://wordpress.org/?v=abc hourly 1 By: Veronica http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/comment-page-1/#comment-146645 Veronica Wed, 03 Oct 2007 14:07:29 +0000 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/#comment-146645 My parents want to give me a $10K gift this year. I am presently a full time PhD student making less than $19K this year. Do I have to pay taxes on the $10K gift? Do my parents have to pay a tax for giving me $10K? My parents want to give me a $10K gift this year. I am presently a full time PhD student making less than $19K this year. Do I have to pay taxes on the $10K gift? Do my parents have to pay a tax for giving me $10K?

]]> By: elaine http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/comment-page-1/#comment-121159 elaine Tue, 17 Jul 2007 03:11:28 +0000 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/#comment-121159 I think about stuff like this all the time. I would pay off my credit card debt (3800), max out the Roth IRA (4000), add 2000 to my emergency fund and spend the remaining 200 on something frivolous. I think about stuff like this all the time. I would pay off my credit card debt (3800), max out the Roth IRA (4000), add 2000 to my emergency fund and spend the remaining 200 on something frivolous.

]]> By: Mr. Bee http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/comment-page-1/#comment-120746 Mr. Bee Sun, 15 Jul 2007 03:16:53 +0000 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/#comment-120746 Similar to Andy, however I will choose slightly different investment: $4000 in Roth in Vanguard Retirement 2045 or 2050 $6000 in Vanguard Retirement 2045 or 2050 Similar to Andy, however I will choose slightly different investment:
$4000 in Roth in Vanguard Retirement 2045 or 2050
$6000 in Vanguard Retirement 2045 or 2050

]]> By: Andy http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/comment-page-1/#comment-120689 Andy Sat, 14 Jul 2007 23:03:12 +0000 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/#comment-120689 I would do: $4000 in Roth in Vanguard Total International $6000 in Vanguard Total Stock Market fund/etf I would do:
$4000 in Roth in Vanguard Total International
$6000 in Vanguard Total Stock Market fund/etf

]]> By: Andrew http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/comment-page-1/#comment-120655 Andrew Sat, 14 Jul 2007 20:08:45 +0000 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/#comment-120655 Is Meghan contributing to her 401k or does her employer offer one? If so, what do you think of the idea of budgeting & living off the $10,000. By using that $10,000 for every day budgets she could enroll in her 401k and start getting the company match. Let's say she has a $52,000 a year salary as a 26 year old in California. If she contributed 6% of her salary to get a company match of 3% that would be: Annual: $3120 in contributions & $1560 in free company match Of the $3120 she contributed, that would likely be around $2500 after taxes. If she could keep the $10,000 in a high yield savings account and use that as the $2500 after-tax shortfall from her 401k contributions in 4 years she would have: $18,720 in her 401k without any growth ($12480 contributions + $6240 employer match) off her $10,000 after tax gift. A couple things to consider: 1) If she is already doing her 401k, this idea blows up. 2) If there is no employer match, the Roth IRA is better. What do you all think? Is Meghan contributing to her 401k or does her employer offer one?

If so, what do you think of the idea of budgeting & living off the $10,000. By using that $10,000 for every day budgets she could enroll in her 401k and start getting the company match.

Let’s say she has a $52,000 a year salary as a 26 year old in California. If she contributed 6% of her salary to get a company match of 3% that would be:

Annual: $3120 in contributions & $1560 in free company match

Of the $3120 she contributed, that would likely be around $2500 after taxes. If she could keep the $10,000 in a high yield savings account and use that as the $2500 after-tax shortfall from her 401k contributions in 4 years she would have:

$18,720 in her 401k without any growth ($12480 contributions + $6240 employer match) off her $10,000 after tax gift.

A couple things to consider:

1) If she is already doing her 401k, this idea blows up.
2) If there is no employer match, the Roth IRA is better.

What do you all think?

]]> By: Compounding http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/comment-page-1/#comment-120630 Compounding Sat, 14 Jul 2007 17:19:34 +0000 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/#comment-120630 Great post! I am sure there are lots of young folks (I am just on the verge of 27, so I am not much different that the person of interest) that get a sum of money every once in a while. The Roth IRA is simply the way to go; $4K right now. Like the others, I would suggest a high-yield money market account. I would also suggest that she start having at least a small amount directly deposited into the savings account today, to add to the balance. With the maximum contribution raising to $5K, next year, $192/bi-weekly will kit that amount. She could start that now, or something a little less. I would say a minimum of $25/pay, though. As soon as the 1st of the year hits, dump the other $5K into the Roth IRA, keep the balance in the high-yield MMA, and keep depositing money bi-weekly (or each pay period). When December 2009 hits, she should have enough for another maximum contribution of $5K, if she adds about $150 each month. She will have contributed $14K by the time she is 29. If she gets 10% on that each year until she is 65, she should have over $520K! She definitely needs to look into her options related to employer sponsored plans with matching, too! Great post! I am sure there are lots of young folks (I am just on the verge of 27, so I am not much different that the person of interest) that get a sum of money every once in a while. The Roth IRA is simply the way to go; $4K right now.

Like the others, I would suggest a high-yield money market account. I would also suggest that she start having at least a small amount directly deposited into the savings account today, to add to the balance. With the maximum contribution raising to $5K, next year, $192/bi-weekly will kit that amount. She could start that now, or something a little less. I would say a minimum of $25/pay, though.

As soon as the 1st of the year hits, dump the other $5K into the Roth IRA, keep the balance in the high-yield MMA, and keep depositing money bi-weekly (or each pay period). When December 2009 hits, she should have enough for another maximum contribution of $5K, if she adds about $150 each month. She will have contributed $14K by the time she is 29. If she gets 10% on that each year until she is 65, she should have over $520K!

She definitely needs to look into her options related to employer sponsored plans with matching, too!

]]> By: resubmit2 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/comment-page-1/#comment-120625 resubmit2 Sat, 14 Jul 2007 16:57:57 +0000 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/#comment-120625 For the short term ( For the short term (

]]> By: Dylan http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/comment-page-1/#comment-120621 Dylan Sat, 14 Jul 2007 16:38:35 +0000 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/#comment-120621 Timely post, JLP. A colleague just sent me a link to Money Magizine’s “Where to put $5,000 now.” It is a list of 43 items by Asa Fitch and George Mannes. So for $10,000, you could pick two from the list. Here is the link: http://money.cnn.com/galleries/2007/moneymag/0705/gallery.5000_dollars.moneymag/index.html Some of the tips are a bit lame, but I thought most were pretty sound. Timely post, JLP. A colleague just sent me a link to Money Magizine’s “Where to put $5,000 now.” It is a list of 43 items by Asa Fitch and George Mannes. So for $10,000, you could pick two from the list. Here is the link:

http://money.cnn.com/galleries/2007/moneymag/0705/gallery.5000_dollars.moneymag/index.html

Some of the tips are a bit lame, but I thought most were pretty sound.

]]> By: pendleton http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/comment-page-1/#comment-120618 pendleton Sat, 14 Jul 2007 16:16:36 +0000 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/#comment-120618 For the short term ( For the short term (

]]> By: Tim http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/comment-page-1/#comment-120611 Tim Sat, 14 Jul 2007 15:42:36 +0000 http://allfinancialmatters.com/2007/07/13/what-would-you-do-with-10000/#comment-120611 I'd buy a plasma tv $10k-$4k=$6k; I'd then buy an iPhone $6k-$600=$5400; I'd then i'd buy 21,600 gum balls from the quarter gumball machine 25cents*21600=$5400-$5400=$0. failing that, i'd put $4k in RIRA, put $2k into emergency fund, put $4k in some kind of index fund. I’d buy a plasma tv $10k-$4k=$6k; I’d then buy an iPhone $6k-$600=$5400; I’d then i’d buy 21,600 gum balls from the quarter gumball machine 25cents*21600=$5400-$5400=$0.

failing that, i’d put $4k in RIRA, put $2k into emergency fund, put $4k in some kind of index fund.

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