FundRobot » Mutual Funds » What should I invest in?

Old   #1 (permalink)
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1) Planning to go travelling for a year or so.
2) I have a full time job making only okay money.
3) I would like to save for travelling but also have some money for longer term savings/retirement.
4) I have a student loan of 5k with a 6.4 interest rate.
5) I have about 8k in the bank

Should I invest in stocks, bonds, cash or a mix?

I presume I should first pay off my student loan as I am unlikely to earn more from investments than I am charged in interest on my student loan, correct?
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Old   #2 (permalink)
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You are asking the wrong question. You should be asking about how to budget your money so that you have some left over after a year to travel. Investing is a long term thing---you put money in some investment and do NOT expect to touch that money for many years. As far a a budget goes-----your question includes a rudimentary budget. First you should be saving 10% of your income after taxes for retirement---preferably in a 401K if your company offers one----otherwise a Roth IRA. This is the money you invest---pick a good mutual fund company like Vanguard and open your Roth there and invest the money in their funds. Next you should have 6 months cash available to cover living expenses if something should happen---sickness, accident, job loss etc. *K is not enough. If you have a family you need some life insurance. Now do a budget adding up your monthly costs for all your activities---food, rent entertainment transportation etc. If you still have money after saving for retirement, building a 6 mo cash cushion and paying all expenses including the student loan THEN you put this money away as a travel fund. If there is no money left over for the travel fund you decide whether to cut back on something else so you can travel.
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