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Beginner's Guide to Investing

Lesson 10 of 12

Investing with Debt

 

Beginner's Guide to Investing

Lesson 10 of 12

Investing with Debt

 

Lesson Info

Investing with Debt

by of debt. Should I still be investing? This is one of the most common questions that we have to debate for ourselves. So first, going back to what I said a lot earlier in this presentation is this idea of what kind of debt are we talking about? Because certainly not all debt was created equal consumer debt, credit cards, anything else? It's high interest. Those need to get paid off because you're not likely to be seeing returns like that in the market again. We're going to come back to this caveat of retirement in a second. But if it's consumer debt, I want you to be aggressively paying that off now with student loans. It's that fun. Answer of it depends. So what exactly does that mean? You have to do the math. I pose this debt question to all the experts that I interviewed for the book, and they almost unanimously came back with this magic number of 5% what they're talking about. It's 5% interest rate on your student loans being a cut off. If you are paying 5% or higher on your stud...

ent loans and interest mathematically, it's probably going to make more sense for you to focus on paying down the debt than trying to be investing in a taxable account in tandem. But if it's under 5% the math could more easily work out in your favor to be doing both at the same time. But the other thing that you have to consider is, even if it mathematically makes the most sense. Does it emotionally make the most sense for you? Because I have yet to hear somebody say, I regret paying off my student loans quickly? Not usually something good said. So you have to decide for your mental health and your own debt and risk tolerance. If you want to be investing in a taxable account at the same time that you're paying off your student loans, that's really a call that's on you. But make sure that you do the math on your interest rates. Now there's always an exception to the rule and that exception Being retirement. I would like it the bare minimum, especially if you have student loans. Honestly, in a lot of cases, even if you have some credit card debt, if you have the option for an employer match, on your account for a 401 K or 403 b. Please take advantage of it, even if it's just a little bit.

Class Description

AFTER THIS CLASS YOU’LL BE ABLE TO:

  • Create an investment plan that’s right for you and your budget
  • Build your net worth through stocks
  • Know the basics of investment terminology
  • Create short, medium, and long term financial goals
  • Understand your company’s investment options

ABOUT ERIN'S CLASS:

Exchange-traded funds. Brokerages. Asset allocation.

Most people want to start investing, but have no idea where to begin. How much do you need to start? How do you know if you’re taking the right first steps? In Beginner’s Guide to Investing, author and financial expert Erin Lowry breaks down the obtuse language and lays out your investment strategy options. Learn the common misunderstandings, set your financial goals, and take strategic steps no matter your starting amount, time frame or business context -- Erin has you covered.

Don’t let beginner’s paralysis get in your way; Erin provides you with the knowledge and tools for financial literacy. Learn the basics of investment terminology, the stock market, saving for retirement and everything you need to feel confident to start growing your wealth.

WHO THIS CLASS IS FOR:

  • Young professionals

ABOUT YOUR INSTRUCTOR:

Erin Lowry is the author of Broke Millennial: Stop Scraping By and Get Your Financial Life Together and Broke Millennial Takes On Investing: A Beginner’s Guide to Leveling-Up Your Money. Her first book was named by MarketWatch as one of the best money books of 2017 and her style is often described as refreshing and conversational. Erin has been featured by The New York Times, The Wall Street Journal and USA Today and on CBS Sunday Morning, CNBC and Fox & Friends. When she’s not thinking or talking about money, Erin is planning her next travel adventure or probably looking up pictures of dogs. Erin lives in New York City with her husband.

Lessons

  1. Class Introduction

    Meet Erin, self-titled “investing translator” and personal finance expert. In this lesson, Erin shares her background, addresses misunderstandings regarding investing, and lays out what you’ll learn in this course: how to know if you’re ready to start investing, must-know terminology, how to handle market ups and downs, retirement plans and more.

  2. Compound Interest in Action

    What is compound interest and how does it work to maximize your returns in any investment account? Erin shows you how compound interest works in your favor over two years, five years and beyond with clear examples.

  3. Time

    Why does time matter so much in terms of investing? Examine a case study with Erin to see how time functions with compound interest to yield higher returns.

  4. Inflation

    In this lesson, learn how investing just a little money can help you combat and even beat the inevitable effects of inflation.

  5. Setting Financial Goals

    What do you need to consider when preparing to invest? Erin shares a checklist to be sure you’re ready. Learn how to approach short-term and long-term goal setting, budgeting and setting up an emergency fund. Erin explains the difference between retirement accounts and taxable accounts.

  6. Must Know Terms

    Being a new investor can be intimidating -- as someone who approached the process without prior knowledge or a finance background, Erin lays out the must-know terminology in layperson’s terms. In this lesson, learn about how to diversify your investment portfolio, factors such as your time horizon and risk tolerance, and the difference between bond funds, ETFs, mutual funds, index funds and more.

  7. Fees

    Don’t let high management fees and fine print sneak up on you; learn how to vet brokerages when considering your investment options. Erin explains and advises on expense ratios, what to ask when considering contracting a financial advisor and where to find details on associated fees to ensure you’re getting value for your money.

  8. Quick History of Stock Market

    Financial downturns have been devastating, yet studying past market events can show us how to weather the storm. Erin gives a quick review of previous American stock market downturns and how to protect yourself when the market does go down.

  9. DIY Approach

    You’re ready to invest -- how do you start? What level of involvement do you prefer? Erin walks you through different options and factors to consider: investment advisors, discount brokerages, minimum deposits, roboadvisors and micro-investing apps.

  10. Investing with Debt

    Should you be investing with debt? Whether you have credit card debt or student loans, Erin advises on whether it makes sense to start investing or not.

  11. Retirement

    Why should your investment goals prioritize retirement and why should you start now? Erin walks you through questions to consider when opening a retirement account and explains the differences between the 401k, 403b, traditional IRA and Roth IRA.

  12. Picking Initial Investments

    In this final lesson, Erin advises on how to choose your investments and approach building your portfolio. She closes by sharing valuable online resources for further information such as calculating compound interest, opening a brokerage account and researching investment options.

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