What should I do with my extra 300 extra dollars per month?

Question

I have a 401 k from my work. Should I invest in multiple places though?

Answer 1

If allowed by your 401K, increase your contribution to it. Other tax advantaged options include setting up an IRA or Roth IRA. (Assuming the investments within these are index funds).

Non-taxed advantaged options could include an S&P 500 index fund. No need to go into individual stocks or speciality funds.

In any case don't waste it on something that you really don't need or even particularly want. There are astonishing advantages to have saved enough to be able retire in your 50s (or 40s) that those who didn't will never even image.

Answer 2

You haven't identified where the 300 came from. If this is an increase in income, then if it is eligible for your 401k plan invest some of it in the plan. Keep the plan diversified so that if one investment is weak others will still be strong. What you can not put into the 401k should be placed in another kind of saving instrument such as mutual funds or Guaranteed Savings Certificates (whatever you call them down there). If you are successfully living on what you make now then put salary increases into savings for something big down the line.

Answer 3

I agree with paradise in that you should have a safe, liquid emergency fund. After that, are you saving (CD's, money market, bank savings accounts) for expenses within the next 5 to 7 years (new car, wedding, house?). What's left over should be invested in a roth IRA for retirement. T. Rowe Price allows you to invest a minimum of $50 per month until you reach their norman minimum of $2500.

Answer 4

:( That's sad. I feel like a killjoy, but I think you'll have to wait. Your dad is out of work, so money is few and far between. 400 bucks is a lot for a kid to get together. Right now, focus on learning more about horses. See if you can find people that own horses and will let you ride with them. Mow lawns when summer comes around. You need to be supportive of you parents right now in these hard economic times, not begging them for a pony.

Answer 5

forget the 401k...it's like pressing both gas and brake pedals to the floor. do you think taxes are going to remain the same years from now? do you think taxes are going to be higher in the future. if you have answered no and yes, respectively then place it in a roth ira... it doesn't have all the features i would like. but at least you are placing it into an area after taxed dollars and withdrawals at time of retirement (59, i think) are tax free. however, if you do not have cushion money to withstand times of potential hardship... save enough money that would last you 6 months to a year (keep it liquid and keep safe). i have already done this and what a mental and financial relief it is for me

Answer 6

Bank accounts and 401k's are not going to get you much above inflation. If you really want the security at least look into a mutual fund.
I'd think of a solid idea and pay some kid to build me a website (or something else that won't consume your time) and when it's finished you've got another income stream and you've got say $800 a month and then find another stream etc...

Answer 7

Initially put it in a bank account. This will draw some interest. When you get over three thousand dollars, then buy a Certificate of Deposit, with the interest going into the bank account. When you get another three thousand dollars, buy another Certificate of Deposit, Keep doing this, until you have one each month. Then each month shift an even amount of money into the CD for that month, when it comes time to roll it over. Even with low CD rates, you will be making money, and not have the risk of the stock market.

Answer 8

Open a brokerage account at Zecco and invest in Microsoft, Sony and Nintendo.

Answer 9

Set up a Roth IRA and you wont pay taxes on the money.

Answer 10

If you work that hard to make that much, pamper yourself! You deserve it. Or maybe buy something nice for you or your lover. Like a nice dinner, a new iPod. Something like that ;)