How to become financially secure.

Post Reply New Topic

I should have clarified more- apologies.
My partner owns the house we live in. Technically speaking I have no rent to pay but it would be fair to at least assume half the house payment, no? Half the house payment is about $1000/month. This is what I'm calling "rent".
Since I am on unemployment I get a monthly stipend of $390/month. So obviously I am not even close to making my monthly payments and my partner is burdened by having to pay my portion of the household bills.
Obviously my moving would not make things any better- the opposite in fact. And even if I wasn't partnered there is absolutely no place in bakersfield I could afford to live in at $390/month income. I would be laughed at for even applying. I'd be back to living in my car (which I can't afford the monthly payment on either).

It's best to keep some liquidity (cash) available for that rainy day but once you have that rainy day fund established, I would personally go with debt securities (I have no idea what ETFs are) as they are more for steady incomes. In a deflationary market, bonds and treasury notes are harder to obtain for differing reasons. Bonds because it is more expensive to issue them and treasury notes because people are converting their illiquid assets into more liquid assets, causing a squeeze. With bonds, the stated returns are less, despite the scarcity, but only because their real returns are higher.

Just the accounting student inputting some words.

I'm still searching for the best method. I'll let everybody know when I find it. Right now, it's playing the lottery.

What do you mean when you find it? You have already found my thread.





Also buying lottery tickets is counter productive.

I could have a go.. when I get some employment it'd work great

Most accountants wouldn't need to know what an ETF was, however most US citizens with investments would be able to tell you. Basically it's a fund that can be traded on a stock exchange. It's designed so that it's priced relative to an index or commodity price so that if that index moves, say, 2%, then so does the ETF. You also benefit from the dividend payments. They do a similar thing with corporate and government bonds. It's got the advantage that if you want a diverse range of investments, you don't waste money on commission, as when you sell or buy an ETF that's charged as one trade, rather than numerous if you bought the individual components. There's also no stamp duty (type of tax) on them in in the UK.

As far as what else you said goes and rainy days, currently this is a monsoon. Also, what you learn that's applicable to company finance, isn't necessarily so with regards personal finance. It does put you in a better position to understand it, though. Most individuals have much smaller amounts of money, and different legislation generally applies to consumers compared to companies. For example, most individuals depositing cash would be protected by the FDIC in the US. Businesses, though would generally have cash amounts that exceeded the guarantee limit. With that protection, I assume it would be better for an individual with a few $K to put their money with a bank, rather than government bonds. Obviously for sums that exceed the FDIC guarantee then US government bonds would be best if you're minimising risk. Note I'm considering protecting what you've got, rather than getting income from it.

Anyway, what I'm outlining is just what I've learnt from reading and investing myself, so feel free to correct me if you wish. I think the important thing is that at the moment things are very uncertain and if you get it wrong you can lose shed loads of money. So, for someone who's not already invested, with a relatively small sum, cash in a savings account is the best bet. Certainly if you've a larger sum and hold a certain view of where we're going, there's nothing wrong with your strategy. At your age, if you're a gambler, put £10k in an ETF invested in some of the biggest chinese companies and that may set you up nicely for retirement... but that's far from a certainty.

Edit: Just noticed you're Canadian. I was assuming you were from the US, but it doesn't make much difference.

That's funny.

I'm currently saving more like 90% of what I earn and spending about 10% at the most. Then again, I am at home or college (payed for by my parents) so I don't have much living expenses.

I think I only spent about $2000 in total all year in 2008. Which probably explains why I have no decent clothes except the 3 teeshirts I picked up for about $2 or $3 each.

Wow thats a really good habit to get into. One day you maybe richer than us all..... If you aren't already

I wish.

I must plan and scheme so that I can earn more per hour out of the time I put into jobs, and thus save up enough to begin investment, probably in property as my parents have lots of experience in that area and I can utilize their advice and skills. Currently I am working 3 jobs, but as I am a casual worker (due to the fact that I am on uni holidays, and i move back south into college again in a month or two) I still don't get a lot of hours.

So ETF stands for Equity Trading Fund? Sorry, I have never even heard of the acronym. I've only ever heard that as a phrase.

Yeah- tell that to the winners.

Exchange traded fund. Google it and you should find plenty.

Sorry, I'm more of a gambler. I need something with a higher return than normal investments. Right now, I'm looking into rare coins and precious metals.