30k in savings from a lawsuit. have touched 2k for myself and lent 21k ( still have 30k, was originally 53k) what else should i do? i wanna invest but don’t know how, also leaving for the military in two minths so don’t wanna do nothing dumb, any tips?
- money lent was to family to start a business and pay off debt, they are paying me $200 weekly every week nonstop so don’t ask too much abt it lol
What to do oh what to do…
byu/GuessGullible8044 inpersonalfinance
Posted by GuessGullible8044
16 Comments
1. Do not borrow any more money away.
2. Read the Wiki
[https://www.reddit.com/r/personalfinance/wiki/index/](https://www.reddit.com/r/personalfinance/wiki/index/)
Assume you will never get the full 21k back
Never expecting given to family back, if anything at least put it into a high yield savings account
Do you have an emergency fund? If not, that’s a good use for the 30k.
Use this site to find a local or online savings account with a decent interest rate:
[https://www.depositaccounts.com/savings/](https://www.depositaccounts.com/savings/)
If you had income from work this year, open a Roth IRA through Schwab or Fidelity, contribute as much as you’re eligible, and invest the account in a broadly diversified fund such as VTI.
53k isn’t nearly enough to be lending out but oh well.
A lot depends on your income and life situation. If no debts or anything and won’t touch for a while, maybe IRA? I assume you won’t need for a home because of Va loan.
Presuming you’re lower income, Roth IRA and Roth TSP. Invest in total us and total international stock index funds (I’d suggest 4:1 or 3:1 or 2:1 ratio of US to international, latter being close to market cap). Keep some cash on hand, a decent amount such as at least 15K. Don’t take out debt for anything in the future except a mortgage for a house which is somewhere you plan to live for at least 5 years and no more than 3x your gross annual salary. No car loans!
Just buy same day expiration options on SPY trust me
People are going to ask. if you want serious advice you can’t be afraid of serious questions.
You’re probably not going to be able to actively manage whatever investment you’ve made while you’re on active duty so probably just put it in HYS? Might as well earn a little interest while you figure out something longer term after you get out
Do you have any high-interest debt(s)? If not, probably stick it in a HYSA for an emergency fund.
I would leave the 30k as an emergency fund, Marcus by Goldman Sachs is a well known bank and the user interface is clean an easy to use (while there are some HYSA’s with higher APY’s, I prefer to stick with well known banks that don’t make me jump through hoops).
[https://www.marcus.com/us/en/savings/high-yield-savings](https://www.marcus.com/us/en/savings/high-yield-savings)
Take advantage of the TSP plan in the military (it’s similar to a 401k plan for federal employees). Make sure you invest at least 15% of your income for retirement (this can be a combination of the TSP and a Roth IRA).
[https://www.fidelity.com/viewpoints/retirement/how-much-money-should-I-save](https://www.fidelity.com/viewpoints/retirement/how-much-money-should-I-save)
If you are in the Delayed Entry Program take advantage of this time and join the Navy Federal Credit Union (all you need is $5 to join). The $5 goes to a savings account (which you do not have to use since the apy is low) and then open a checking account (I’d probably go with 3k in this account). Take your account number, routing number, and debit card with you to boot camp (you will be ahead of the game and this is a great credit union to be a part of even if you leave the military).
[https://www.navyfederal.org/](https://www.navyfederal.org/)
What do you mean you just lent 21k
Do you have an emergency fund? If not, that would be the first thing to put the money towards – approximately 6 months’ worth of living expenses in a HYSA at a bank (should get between 3.5 to 4% interest as of today) or money market account with one of the big brokerages (similar return, slightly on the higher side).
Beyond that, there is a question of when you are likely to need the money. If you expect to need the money within a few years, you should save/invest in the same way as above. If your time frame is longer – for example saving for retirement, then you can invest in low cost ETFs/mutual funds for higher returns (but with higher near-term risk). See the Wiki of r/Bogleheads for some good options.
>don’t wanna do nothing dumb, any tips?
Well, unfortunately, you already did the dumbest thing possible in lending the 21k. Definitely don’t do that again.
It doesn’t sound like you have much else in the way of savings. I would just put this all in a high yield savings account for an emergency fund.
I know everyone is saying it was dumb for OP to lent money to family(which it was. ) but since it was a windfall from a lawsuit it might have been a known event and wasn’t avoidable from family.
Though hopefully OP had some kind of contract/agreement written out…