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Unfortunately I am also about the same amount in debt. Should I pay off all of my debts and be left with nothing (but a fresh start) or invest it and just keep paying the minimum payments on my debts? Should I pay some of my debts and invest the rest? This is the most money I will ever have especially all at once. What is a fast, easy investment that would give me the quickest profit? Is there any way to explain to me stocks / investments, etc. in an easy quick summary? THANKS!

2007-01-24 09:17:31 · 15 answers · asked by Lisa P 2 in Business & Finance Investing

I DO NOT WANT TO INVEST IN DRUGS!! Thanks anyway

2007-01-24 09:33:14 · update #1

I know this is pathetic but my debt is all credit cards - I have no equity/assets, I don't own a home, etc. that's why I need a good plan for this money so I don't find myself in this situation again.

2007-01-24 16:16:59 · update #2

15 answers

Firstly, you have to be experienced to be a good investor. I would pay off some of the debt, keep some for educating yourself in stock market investing, and keep the rest in a short term CD until you learn about stocks.

Start by reading the book "Understanding Wall Street". Also, read the paper Investors Business Daily everyday, it has a lot of information about investing. Take some classes at your local community schools, which are very inexpensive. Read about technical and fundamental analysis at www.stockcharts.com. Make sure you understand technical analysis before investing.

Once you start trading, take a course with a professional trader, more expensive, but worth it.

As you get more experienced, you will become a better investor/trader, go and make some money and pay off the rest of the debts. Then make more and more money. More importantly, learn to control emotions, fear & greed, this can be done by working on yourself, self-improvement.

Good luck.

2007-01-24 09:37:37 · answer #1 · answered by Anonymous · 0 1

The easy answer is to pay off your debt first and start fresh. Most likely you are paying interest on your debt that is more than what you could easily make in the market. However that answer doesn't address the psychological benefits of having some savings and money invested. If the interest on your debt is kind of high like 10% or more consider paying off a good chunk say $40k. and buy a good 6 month CD. Don't go much longer than 6 months since you don't get much more in return. Buy from an online broker who doesn't charge a commission and can shop around for the best rates instead of being locked into one particular bank.
If you interest rates on your debt is lower consider investing a little more like $20k. Again go to the online brokers like Schwab or Ameritrade for guidance. Look at Exchange Traded Funds as a good way to get diverse exposure to a big part of the market.

2007-01-24 22:10:21 · answer #2 · answered by ils11r 2 · 0 0

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2007-01-24 23:30:54 · answer #3 · answered by jureme 1 · 0 0

Unfortunately the best guaranteed return you can probably get is to pay off your debt. If you're paying 15-20% on your debt and you pay it off you get an instant return.
What you need is to establish discipline with your spending habits. If you could pay off your debts and rein in your spending you could then establish an investment account (with around $3,000) into which you could dollar cost average- which is just a fancy way of saying invest a certain amount of money at regular intervals. I can't explain all there is to know about investing in this small space but if you're interested I highly recommend Vanguard.com for beginners as well as advanced investors. If you want an idea of where to start investing in the stock market look for information on "index funds".
These are "mutual funds" which means that they are funds comprised of many different stocks and sometimes bonds too and they hold a particular group of stocks depending on the kind of fund they are. For instance- large company stocks, small company stocks, foreign stocks and so on. Best of luck.

2007-01-24 18:07:42 · answer #4 · answered by alk 1 · 0 1

I think this depends on your amount of debt (exactly $50k)? and also your ability to repay that debt in the future (employment) and MOST importantly: what is the interest rate on the debt?-if its 5% that's more attainable as an investment (you could probably get 8-10% right now on a good mutual fund) or if the interest is 15% (or more)-like credit card debt generally....if it is a mortgage then there are favorable tax considerations (like deducting the interest).

For investing, it depends on your risk tolerance-high risk = potential for high return-but potential for loss too...you might be better off with a Money Market Savings acct.-just depends on your goals/needs/financial situation.
So I guess the answer is we need more information, to better advise you.

2007-01-24 17:39:56 · answer #5 · answered by gaapsox 1 · 0 1

Pay off any high interest loans first like credit cards. Then invest the rest in an index fund. Some people spend their whole life trying understand the market so a quick summary would be difficult. good resource motleyfool.com. bobbrinker.com and his radio show.

2007-01-25 00:17:11 · answer #6 · answered by smussehl 1 · 0 0

EASY answer PAY OFF YOU DEBT. Most likely not return on an investment will beat your interest rates.

I told a friend about this site and they liked it too, good information for everyone. it cost $20 but is worth it - gets you all the information you need to pick solid stocks

http://www.thestockfather.com

2007-01-24 18:27:25 · answer #7 · answered by ibfa7 2 · 0 1

What are your interest rates in each debt, exactly?

If you are just paying 20% in a credit card then it would be wise to invest in a 24% investment and keep paying the debt and use the extra 4% to reinvest.

On the other hand, if your interest rate is 48% then it would be better to pay off your debt.

If you email me the actual rates I can design a plan for you.

Top 4 Answerer.

2007-01-24 17:54:19 · answer #8 · answered by Anonymous · 1 3

Hi Lisa. I am looking for investors in my company. I am willing to offer you a 7% return on your money, and pay you monthly interest via a promissory note. This means I would pay you $3500 a year for the use of your money, divided by 12 means I would pay you $291.66 every month. Then, when your promissory note comes due, I will return your $50,000 or rollover the note if you wish to do so. Please contact me if you're interested. Good luck...Leo hithere11757@yahoo.com

2007-01-24 20:03:46 · answer #9 · answered by hithere11757 2 · 1 0

You would rather pay off your debt! Investing is kind of gambling.

2007-01-24 20:51:48 · answer #10 · answered by Young and Famous 3 · 0 0

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