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Thread: What would you do with $12K?

  1. #1
    Chicagoeditor
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    Default What would you do with $12K?

    It's an unexpected windfall, now sitting in my checking account. I have virtually no debt (aside from mortgage and home equity loans), and I'd like to play this money in some interesting way. I already dump a good deal of cash every month into a Vanguard Emerging Markets fund, which seems to be doing quite well (as America struggles, the developing world rises).

    Any thoughts?

  2. #2
    Pamela
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    Default Re: What would you do with $12K?

    Call me a risk taker, but i bought into GM...and i would buy more!

    Bought thr first time at an all time low for them....cheap!

    They are not going down...the new vehicles are kicking ass!

    I feel good about this investment.

  3. #3
    God/dess scarlett_vancouver's Avatar
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    Default Re: What would you do with $12K?

    Put it on your mortgage. As much as you can, anyways.

    Feature costumes for sale!

  4. #4
    Banned Melonie's Avatar
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    Default Re: What would you do with $12K?

    the non-politically correct approach ... wait for a bottom, then buy shares of USO, XOM, BP etc. !

    The current decline in oil prices is based on a very mild winter in the northeast US (so far), very high oil production rates by Russia, reduced oil purchases by 3rd world countries who are essentially bankrupt, a general belief that the military situation in the middle east will get better as a result of the new congress tying GWB's hands, and a respite in the US dollar's exchange rate decline.

    If (or IMHO WHEN) the calm before the storm is over and the storm itself arrives, today's $54 a barrel oil could shoot to $74 in a blink of an eye ... or could shoot past $100 if Israel winds up nuking Iranian uranium enrichment facilities ! This sort of investment is a fairly high risk gamble, but one that offers fairly fat promise of reward.

  5. #5
    Chicagoeditor
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    Default Re: What would you do with $12K?

    Melonie, excellent analysis. I suppose Vanguard has an oil stock portfolio, yes?

  6. #6
    Yekhefah
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    Default Re: What would you do with $12K?

    I would take a fraction of it, one-quarter or one-third, and fund my short film.

    Hey, whattayaknow! If you're feeling generous and want to make a novel investment, there's a link in my sig where you can check out the short film and become an Executive Producer on it. My investors (people who contribute $500 of funding or more) get a proportional share of my festival winnings, plus Executive Producer credit. It'll be going to a lot of festivals and the prizes range from $1000 to $10,000 so the payout ought to be good if we do as well as we think we will. So far the script has gotten terrific response and I've got a lot of very experienced crew willing to work for free. My cinematographer's last short went to Cannes!

    </shameless promotion>


  7. #7
    Chicagoeditor
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    Default Re: What would you do with $12K?

    Quote Originally Posted by Yekhefah View Post
    I would take a fraction of it, one-quarter or one-third, and fund my short film.
    If I were in generous mood--I'm not--I'd sink the money into my ex's plan to open a resturaunt here. Sorry, Yek. I support you in spirit!

  8. #8
    Banned Melonie's Avatar
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    Default Re: What would you do with $12K?

    IMHO screw Vanguard and their management fees ... you can now buy Exchange Traded Fund shares based directly on oil prices = USO

    also, you might need to hurry a bit because this just hit the news wire ...



    If you're really committed to Vanguard, they offer VGENX which is an 'energy' fund - it's not a pure oil play, but the major investments are all in oil companies

  9. #9
    Yekhefah
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    Default Re: What would you do with $12K?

    LOL, fair enough!

  10. #10
    Banned Katrine's Avatar
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    Default Re: What would you do with $12K?

    I'd give you some ideas, but I get paid to give that kind of advice baby.

    One word to think about though: water

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    God/dess virgoamm's Avatar
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    Default Re: What would you do with $12K?

    So do you want us to give you advice about what we think you should do with your money or are you asking us what we would do with that cash? If I had 12k, I'd take a trip somewhere for fun. I'd like to go to Thailand, China, Vietnam or possibly Europe for a couple of months. I'm a travel fiend and want to see everything!

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    Default Re: What would you do with $12K?

    I'd spend $3000 on a month in Thailand and put the rest toward the mortgage.

  13. #13
    Lola Rose
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    Default Re: What would you do with $12K?

    in my mind: 2 awesome weeks in nyc
    in reality: add it to my property investment $

  14. #14
    Chicagoeditor
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    Default Re: What would you do with $12K?

    My goal is investments, ladies. But the Thailand and NYC trips do sound fun.

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    God/dess fancygirl's Avatar
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    Default Re: What would you do with $12K?

    1. Roth IRA for whatever the most is you can put in this year. It was $2000, have they upped it to $4000 now? Mel?
    2. to the mortgage or home equity loans, I'd see which one has the most interest on it, and pay off a chunk of that, and possibly renegotiate a lower interest rate if possible (I am NOT anything CLOSE to an expert. just from what I've picked up.)
    3. any ways you can improve your QOL, or the profit margin of whatever you do for a living?
    4. you've talked about depression and tanning beds. sounds like your chance to go to a tropical island (though I second the Thailand idea) and be a beach bum for a couple of weeks this winter.
    5. I'd be interested in seeing where Gold is at the moment. If it reached below a certain point (Mel would be best on this exact point) I'd buy...but that's a long term thing.


    A side question: Has there been anything that you've wanted to do your entire life that you've never done? Sounds like now's the time to do it.

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    Banned ArmySGT.'s Avatar
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    Smiley Re: What would you do with $12K?

    Precious metals




    Honest to goodness real silver and pre-1964 coins that you can keep in a safe at home with no one else to know.

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    Banned Melonie's Avatar
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    Default Re: What would you do with $12K?

    ^^^ actually, the precious metals have recently been 'beaten down' as a result of some 'official' US dollar exchange rate manipulation having taken place ( yeah yeah to the conspiracy theories ). As a result I recently took the opportunity to load back up on some shares of 'junior' mining companies (specifically MFN in late december and 2899.hk = Zijin Mining which I just bought).

    I'm not a big believer in coins, and especially not in silver coins due to the 'price premium' associated with buying coins that (probably) won't be recoverable when you sell them. See and compare the selling price of coins vs the selling price of bars of equal weight ! Personally, one ounce gold bars are still my favorite !

    Also I'm in total agreement with the Sarge that if you're going to start 'collecting' precious metal bars or coins, they're best kept at home and in secret ! I actually have two safes at home for this purpose. One is an el-cheapo WalMart safe that is in a fairly easy to find location in my bedroom, in which I keep just a couple of hundred bucks and whose main purpose is to divert burglars / thieves interest and cause them to waste time if they should ever try to rob me. The other safe is of much higher quality, and is permanently installed in a much more difficult to find location, in which my serious goodies are kept.


    On the subject of contribution limits to approved retirement funds, yes the aggregate contribution limit has been raised to $4000 per year. However, this applies to the sum total of all annual contributions to all types of approved retirement funds. Personally, I'm convinced that making large contributions to any approved retirement fund will wind up being a money-losing proposition 20-30 years from now, on the reasoning that Social Security and medicare are in such bad fiscal shape over that time frame that the gov't will have no choice but to cut Social Security and medicare benefits for people who have been responsible enough to save for their own retirement in order to continue providing Social Security and medicare checks to other people who haven't bothered to save ! As such, putting large amounts of money into a Roth or conventional IRA will probably only result in you being forced to spend that money to cover your own living and medical expenses once you retire, whereas other people who did something different with their money (like for instance collecting gold bars) will still be receiving Social Security and medicare benefit checks !
    ~
    Last edited by Melonie; 01-13-2007 at 08:47 PM.

  18. #18
    Lola Rose
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    Default Re: What would you do with $12K?

    where can you buy/sell gold bars?

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    God/dess fancygirl's Avatar
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    Default Re: What would you do with $12K?

    so...we shouldn't invest in roth ira's???

    I know you're talking about irony, but seriously--

    also, how does the change to 4,000 affect the early savings plan. Like I heard if you did the 2,000 a year in the roth ira from 18 on, the way that it compounds makes being a millionaire really easy later on.

    Sorry-- I don't have the figures or even an article to link to. Just wonder if now, at 23, what my chances are of having a million (or more) dollar nest egg if I started to do the 4,000 contribution every year.

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    Featured Member short skirts's Avatar
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    Default Re: What would you do with $12K?

    I would talk to an investment advisor who can properly allocate your funds into low risk investment opportunity based on your finances.

    www.flexplan.com

  21. #21
    Chicagoeditor
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    Default Re: What would you do with $12K?

    Thanks for all the ideas, all.

    My plan at the moment is to spend the windfall on rehabbing a bathroom. Not only is this badly needed, it will add to the value of my house.

    Now only if I could locate a contractor--with experience working on Victorians (there are issues of old plumbing and plaster walls, not to mention my lack of knowledge in the design aspects of the project--I can trust. I have interviewed three contractors so far and have yet to find one I like.

    If any funds are left over (doubtful), I promise to spend them on something fun.
    Last edited by Chicagoeditor; 01-14-2007 at 09:17 AM.

  22. #22
    Banned Melonie's Avatar
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    Default Re: What would you do with $12K?

    so...we shouldn't invest in roth ira's??? I know you're talking about irony, but seriously--
    Well of all the gov't approved retirement plan options, Roth is the least 'objectionable'. However, because of the tax-free nature of Roth dividend and interest earnings, the gov't still has 'strings attached' to that money. Admittedly the strings attached to a Roth are far fewer than to a conventional IRA. However, the gov't is totally aware of the existance of that retirement nest egg, and indeed has the power to change rules re eligibility for other retirement benefits at any time in the future. One of those changes will very probably be the 'means testing' of Social Security and Medicare benefits. In other words, 40 years from now if you have saved $1 million in a Roth, the gov't may deny you Social Security checks and Medicare benefits until you have spent that $1 million paying for your own living espenses and medical care.

    Sorry-- I don't have the figures or even an article to link to. Just wonder if now, at 23, what my chances are of having a million (or more) dollar nest egg if I started to do the 4,000 contribution every year.
    The way the US dollar is inflating, there is absolutely no doubt that you could wind up with $1 million in your Roth account 40 years from now. However, the power of compound interest is cancelled out by the power of cumulative inflation. Over the past 40 years, consumer price inflation has gone up at least 600&#37; (in 1967 a new car cost $3,000, a postage stamp cost 5 cents etc.). Assuming the same inflation rate into the future, the purchasing power of your $1 million Roth account when you retire in 2047 would only equal $167,000 of today's dollars.

    This amount would compare to the potential loss of about $22,000 per year in today's dollars worth of Social Security checks ( = $132,000 a year in 600% inflated 2047 dollars) , plus whatever costs for medical care were not covered by Medicare. With such a 'means test' in place, your $1 million dollar nest egg would probably be exhausted after less than 10 years of retirement ... at which point you would be 'broke' and finally become eligible for Social Security checks and Medicare coverage.

    On the other hand, if that same $4000 per year had been invested in real estate or gold bars or other assets, 40 years from now you could immediately start receiving $132,000 per year (in 2047 dollars) in Social Security checks plus Medicare health insurance coverage ... and still have those assets !

    Of course this is all speculation ... however the courts have ruled that Social Security, Medicare and other retirement programs are NOT cast in stone contracts, thus the gov't has the power to eliminate them or to put conditions on them at any time in the future. The demographics of future retirees versus future working taxpayers, and US gov't debt obligations to the rest of the world, unfortunately, are NOT conjecture but very real.

    where can you buy/sell gold bars?
    here are a couple of places ...
    (which is very easy but a tad expensive) and
    (which is as cheap as it gets but a bit complicated )

    I usually buy (and occasionally sell) 1oz gold bars 10 at a time from Kitco ... which keeps the transaction under the $10,000 reporting limit and also minimizes shipping and insurance costs. As you'll notice, Tulving has lower mark-ups (like $3 cheaper per ounce) and free shipping but also has a 20 ounce minimum plus the necessity to use bank wire transfers for the purchase (which are guaranteed to generate a cash transaction report).

    ~
    Last edited by Melonie; 01-14-2007 at 02:52 PM.

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    Banned Melonie's Avatar
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    Default Re: What would you do with $12K?

    Chicagoeditor ... here's hoping that the real estate value you'll be adding by investing in remodeling your bathroom won't be immediately cancelled out by a decline in local real estate appraised values !!!

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    Default Re: What would you do with $12K?

    I get what you're saying Melonie. I guess I've been taught since grade school to ignore social security and medicare since it's almost guaranteed that it won't be there when I need it.

    With the gold bullion-- save deposit box at the bank? Does the government get to tax this when I buy it or when I sell it at some point?

    I'm not ready to get into real estate at the moment, but I do know that I'll buy a house in the next 4-7 years. My plan (and point out if I'm being an idiot, seriously) is to pay either for all of it at the same time (I have this thing against the interest system) since I'm not planning on buying in a crazy expensive area, OR have a really huge chunk paid off, and then get the rest paid off in 5 or, at the most, 10 years.

  25. #25
    God/dess Bella21's Avatar
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    Default Re: What would you do with $12K?

    Gah, I have no debt at all and I just sit on my money (it's in a bank, though). Is that really so bad?? The investing thing just seems so over my head.
    If you think school is hard, try being stupid.

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