When you have more money than you need

[vexvelour]

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There is so much e-penis waving involved

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This made me giggle for a few minutes.

[howzit]

save the money. . .you may not need more than the $20 for buying food and drinks for your friends now. But that may not be the case in a few years when you leave college or even by the time you're an upperclassmen. In college i was broke and still got by w/out thinking about it much.
Money however buys time and consequently freedom. You don't need to work everyday to pay rent, or u pay others to do your laundry, taxes, chores or whatever you don't want to do, so that you can spend time pursuing your other passions or interests.

Sit on it, accumulate it, because as u get older, even in your twenties, the responsibilites and bills add up. this is truer when you have a siginificant other and are planning on a future. Having excess cash lends to piece of mind for your future, unless you're a hippie.

[tongni]

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There is so much e-penis waving involved in the "it's only 5k, it's only 10k" posts.

Clayton didn't say how much it is, nor does it matter.

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Probably only 100k.

[ClaytonN]

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more money than you NEED for what? $2800 isnt that much money.

link


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It's more than that now. But nice research.

[mmcd]

It's really not that difficult to get to the point of having more money than you need. Getting to the point where you have more money than you want is the tough part. Personally, I have much more money than I need, but much less money than I want, so on it goes.

Clayton –

Good for you that you have the other money problem: having too much. 90% of the people I know don’t have enough money. Almost everyone I know, from college kids to my friends to my colleagues, continually complains about not having enough money. And it sucks. Kinda funny, I work at a bank. One thing that makes me really sad is how many people I know can’t manage money to save their lives. More often than not, lottery winners who have never had too much money eventually blow it all on CRAP and wind up worse than before they won. I don’t know how much is too much for you, but it really doesn’t matter. Of course, the decision is yours, but since you asked for the advice...here’s my bottom line:

Whatever you do, keep some of it (hopefully two or three months’ worth of your current income) in the bank and easily accessible as a rainy day fund / cash flow cushion. Only in case of emergency do you break the glass. The peace of mind is refreshing.

Now, for the rest of the money.

Don’t take on additional liabilities or expenses that will pinch your cash flow too tight, especially for something that won’t hold its value. A cautionary tale. One of my friends thought he had enough money to buy an incredible 2000 GT Roush Mustang, price tag $45,000. Beautiful ride. He could swing the payments, but the maintenance ate him alive. He had to give up the car and pay the dealership $7500 to get out of his lease. Now he drives a beat-up used POS and is living paycheck to paycheck. If he had kept that extra money in the bank, at least he wouldn’t be freaking out every time he had to pay a bill.

Sure, you could get into a mortgage and buy a house. I love my house. It gets better every day. But I also intend to stay here for the next ten years or more. If you don’t plan on staying in your college town, either you have to sell it or rent it. If you improve it and sell, maybe you can flip it for profit. If you rent it out, having that revenue-generating asset may be nice if you can keep it occupied with quality tenants. A possibility, but please think this one through.

Investments have been mentioned. I’m not a fan of IRA’s (Roth or otherwise) unless I have an employer who will allow pre-tax contributions and match funds. Yes, you should save for your retirement. The return may be decent. Compounding interest is even better. Problem is, in order to avoid taxes and penalties, you have to wait until retirement age (65 or better) to withdraw your money. Another problem is that most stock fund managers have terrible track records. If you choose this route, I would get a self-directed IRA and do some serious research. Sure, you could invest in an index fund, but the market’s current returns are anemic at best, and they’re not showing any signs of returning to historic market average any time soon.

You could also invest on your own, but again, please do your research before buying. Caveat emptor, pal.

There it is. That spare-no-expenses Vegas trip sounds really fun though. Can I go? =)

ScottieK

[captZEEbo1]

don't buy expensive toys. Just keep it your bankroll and try to move up in limits or something.

Also, I think you are only allowed to contribute to a Roth IRA if you have earned income, so unless you got a job also, that won't work.

Listen to the folks who are telling you to invest/save anything extra for the future. You still have tuition to pay for next year. If you have tuition covered you'll graduate someday and want a house, decent car, food. If you can invest now you can have some income coming in post-college even without a regular job.

At your age charity is a distant second choice, but viable. Your college would certainly welcome a check in any amount to be invested in the endowment of your choice. The beauty of this is it helps future students.

But the first thing I'm doing is building my bankroll so that I can play bigger games. As the amount of money involved increases, so does the challenge. Since you seem to be board at your current games, move up a level or two and see if you can beat those games.

[RunDownHouse]

Clayton,

Other than "save some, blow some," I don't have any advice for you on how to spend your winnings. Rather, I'd like to congratulate you on keepin' on keepin' on when you were thinking of taking a break before you went off to Athens. Here's hoping you have a great four years, and use some of that cash to take some friends/good girlfriends to nice dinners.