Quick Answer: Not all investments are scams, as demonstrated by this couple’s successful real estate portfolio generating 12% gross returns with 75% debt paid off. However, financial experts recommend diversifying beyond a single asset class like real estate to protect against sector-specific risks that could impact the entire portfolio.“Dear Paul,My wife and I cashed out …
Quick Answer: Pay yourself first” means prioritizing savings and investments before other expenses, as demonstrated by this investor contributing $4-5k monthly toward a $250k Vanguard portfolio split 40% domestic/40% international/10% REITs/10% bonds. The aggressive 90% stock allocation reflects their $5k monthly pension starting in 2022 and additional inheritance safety nets.“Dear Paul,Can I run my vanguard …
“Dear Paul,Annual Gross Income: 66,000401k balance: 16,000Roth IRA balance: 6,000Savings: 5,500Stock: 1,500Grad Student Loans: (72) payments left of one $520 combined payment per month on total $32,500 balance on the following (so, $5,000 interest would be paid over the life of the loan at this payment rate).Loan 1 Direct Unsub $5,500 balance, Interest rate 2.11%Loan …
Quick Answer: Using a 401(k) to pay off a mortgage is possible but inadvisable due to a 10% early withdrawal penalty for those under 59½, full taxation on the distribution, and depleting retirement savings. The financial advisor recommends against this strategy despite the benefit of becoming debt-free.“Dear Paul,My 401 k has lost 1.7% this year. …
Quick Answer: Taking a 401K loan for a car purchase in one’s late 50s is not recommended because it uses retirement funds to buy a depreciating asset and may trigger tax penalties for pre-59½ withdrawals. Instead, couples should explore low-interest auto loans or dealer financing with 0% rates to avoid hindering retirement savings.“Dear Paul,Work car …
Quick Answer: Deferred compensation plans typically restrict fund access until normal retirement age (often 59½) and don’t allow early withdrawals for financial hardship. Employees facing debt should explore 401k loans or hardship withdrawals instead, as deferred compensation funds remain inaccessible until retirement.“Dear Paul,Last year I had an income downturn. I have credit card debt that …
Quick Answer: Using an IRA to pay credit card debt before age 59½ triggers income taxes plus a 10% penalty, reducing a $40,000 withdrawal to approximately $26,000 after taxes and fees. The withdrawal also eliminates tax-deferred growth potential needed for retirement planning.“Dear Paul,CC debit and trying to find the best way to handle the situation.We …
Quick Answer: A college student with $18,000 in savings should keep 3-6 months of expenses in a money market account for emergencies, then invest the remainder in diversified funds through discount brokerages like Schwab. Student loans can remain unpaid if they have low interest rates and favorable terms.“Dear Paul,Hello, Im a college student with $18,000 …
Quick Answer: There is no advantage to waiting to invest during deployment, as starting retirement contributions immediately allows for compound growth over time. The military couple should prioritize their TSP and Roth IRA contributions (totaling $25,000 annually) while deployed rather than delaying investments for discretionary purchases like sports cars.“Dear Paul,We are an active duty military …
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