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  1. #1
    Upgrading my engine DXchulo's Avatar
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    What do you do with the money you save?

    Hey guys. I'm not car free, but I use my car as little as possible and my goal is to get rid of my car after Christmas when my insurance runs out. I want to invest the money I would have spent on insurance and whatever I get back from selling my car.

    What do you guys do with the money you save? Do you play it safe with something like treasury bonds, or do you mess around in the stock market?

    Just for background, I'm 23 and I'm going to get married next summer. After I get married I'm going to the Peace Corps for 2 years, so I can afford to be patient here. Treasury bonds seem like a good idea to me, but I don't have a ton of money to invest and 4% interest seems pretty low.
    centuryperweek.blogspot.com

  2. #2
    Humvee of bikes =Worksman Nightshade's Avatar
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    Since you're a young person I'd favor simple U.S. Savings Bonds roiling
    them over as they mature to start with. You'll have the invest ment but
    still be liquid in case of an emergency. There's also the slow but steady
    paycheck "I don't see the money so I don't miss it" aspect to Savings
    bonds.

    Hold these bonds 'till you retire come hell or high water using the rest
    of your 'savings' money to invest in stocks or whatever.

    The point here is.......
    Start small then keep a STEADY FLOW of money going into bonds so build
    that head of steam you need. In very few years of steady saving your
    savings locomotive will have built up a enough steam to start showing
    you some VERY interesting numbers.

    Remember.......slow & steady and never stop putting some money by
    each week even if it's only $ 5 (or more). Spend less than you take home
    and save the difference. It's really a painless process slow & steady.
    My preferred bicycle brand is.......WORKSMAN CYCLES
    I dislike clipless pedals on any city bike since I feel they are unsafe.

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    Steel: nearly a thousand years of metallurgical development
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  3. #3
    Dare to be weird!
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    Being retired but not yet eligible for Medicare, the amount I save annually from not owning a car almost exactly pays for my private health insurance, which is by far my largest annual expense. My income doesn't really allow me to have both.

  4. #4
    370H-SSV-0773H linux_author's Avatar
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    - good for you w/the Peace Corps... i tried to join in 1976, but it never responded to my application, so i joined one of the five armed services of the United States - a service aimed at saving lives on the sea, along with combating drug smuggling, intercepting illegal migrants, and mitigating oil and chemical spills in U.S. inland and coastal waters...

    (you can guess which service... i did 20 years and now have a nice COLA-increased lifetime pension w/full medical care for $230 a year... i only wish i had joined at 17, as i could have retired at 37!)...

    - otherwise, i say:

    - go with a ROTH IRA - but you have to have income in order to invest...

    - failing that, a personal IRA...

    - if you had a 'real' job (kidding!), max out your 401(k)...

    - i started out w/Savings Bonds while in the military... bought my first house using the Bonds on a VA loan (no down payment required, and a VA loan is assumable!)...

    - had some extra money, then put it into mutual funds, then cashed the funds and bought real estate with a 3,750 percent return on that investment!

    :-)

    p.s. credit cards are evil - get rid of 'em! and Vanguard is the way to go for mutual funds and other investments... (i don't work for 'em, but am just a happy retirement-bound investor)...

  5. #5
    tsl
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    Quote Originally Posted by DXchulo
    What do you guys do with the money you save?
    I spend it on bike *****.

    Seriously, I used the savings to finance my business.

  6. #6
    hell's angels h/q e3st ny brunop's Avatar
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    Quote Originally Posted by tsl
    I spend it on bike *****.

    Seriously, I used the savings to finance my business.
    money spent on bicycles isn't real money.
    ". . .a striped jersey under his jacket; bared calves (outside the bicycle track); cap pushed back; feet in a false position on the pedals; a barking horn, a disorderly appearance, an always-dry tongue, and a definite fondness for wine merchants. . ."

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    Quote Originally Posted by DXchulo
    Just for background, I'm 23 and I'm going to get married next summer. After I get married I'm going to the Peace Corps for 2 years, so I can afford to be patient here. Treasury bonds seem like a good idea to me, but I don't have a ton of money to invest and 4% interest seems pretty low.
    Congradulations on getting married. I would hold off on any long term investments like bonds that require you to lock it in for several months until your're married. There are so many expenses that you'll have to pay for and this money will be used in the process.

    If you can stay carfree, the money will come back again and your savings will return. Just make sure to stay carfree. ;-)

  8. #8
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    Quote Originally Posted by DXchulo
    Just for background, I'm 23 and I'm going to get married next summer. After I get married I'm going to the Peace Corps for 2 years, so I can afford to be patient here. Treasury bonds seem like a good idea to me, but I don't have a ton of money to invest and 4% interest seems pretty low.

    Hopefully you can get away with a small wedding and not end up owing thousands. A couple of my friends spent 10 grand + and have spent the first few years of marriage in debt to their eyeballs. You know the story, two newer cars, 180k house, 10k furniture, 10k credit cards, 6k honeymoon......

    she owns your balls and the bank owns an arm and a leg.

  9. #9
    One speed: FAST ! fordfasterr's Avatar
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    Quote Originally Posted by Tightwad
    Since you're a young person I'd favor simple U.S. Savings Bonds roiling
    them over as they mature to start with. .....

    Please excuse my ignorance... where can I get started with something like this?

    Do I go straight to the bank? Is there an online alternative to do these things?
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  10. #10
    Upgrading my engine DXchulo's Avatar
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    Thanks for the info, guys.

    About the wedding, we're keeping it relatively cheap so as not to have any debt when we come back. I only make $11,000 a year (grad student) and I could have saved $3,000 - $4,000 last year, but I had a car accident (at which point I was already car light and wanted to be car free, but my family pressured me into buying a car) that wiped out most of that. I can save that same amount of money this year and that will be enough for my half of the wedding. The car insurance money isn't figured into the wedding budget, so it's extra, along with the money I can get from the car.

    This money that I'm investing is the modest start to saving for a down payment for a house. We won't be ready to buy a house until about 3 years from the time I invest it, which means that I think stocks are out of the question because stocks are more of a long term thing. A treasury bond would be nice since it's almost a sure thing and you can get your money back at any time, but I haven't ruled out something like an index fund or an ETF yet.
    centuryperweek.blogspot.com

  11. #11
    Upgrading my engine DXchulo's Avatar
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    Quote Originally Posted by fordfasterr
    Please excuse my ignorance... where can I get started with something like this?

    Do I go straight to the bank? Is there an online alternative to do these things?
    Check this out: http://www.savingsbonds.gov/indiv/indiv.htm
    centuryperweek.blogspot.com

  12. #12
    Geosynchronous Falconeer recursive's Avatar
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    I invest it all in bikes. Seriously though, I'm pretty sure I have spent more on bikes than rent over the past couple of years.
    Bring the pain.

  13. #13
    J E R S E Y S B E S T Jerseysbest's Avatar
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    Gold?
    Quote Originally Posted by SingingSabre View Post
    Cheating: a symptom of the problem.

  14. #14
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    make sure and pay yourself first. Then maybe a higher interest yielding savings account say along the lines of ING Direct, possibly a money market account assuming you're going to put/keep enough there to satisfy any minimum requirements

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    Quote Originally Posted by r8ingbull
    Hopefully you can get away with a small wedding and not end up owing thousands. A couple of my friends spent 10 grand + and have spent the first few years of marriage in debt to their eyeballs. You know the story, two newer cars, 180k house, 10k furniture, 10k credit cards, 6k honeymoon......

    she owns your balls and the bank owns an arm and a leg.
    Man...... Give your friends my condolences.

  16. #16
    Sophomoric Member Roody's Avatar
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    With the money i save, I work 4 days a week instead of five, and I still have a nice crib.


    "Think Outside the Cage"

  17. #17
    Chubby super biker bdinger's Avatar
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    Funneling it straight towards paying off debt. By next spring I should be a homeowner, and free of all debt besides that mortgage.

    And if I lose another 75 lbs, I have the "less fat so you get a Stumpjumper!" fund. But who knows how long it will take to cash in that fund.. hopefully soon

  18. #18
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    Quote Originally Posted by DXchulo
    This money that I'm investing is the modest start to saving for a down payment for a house. We won't be ready to buy a house until about 3 years from the time I invest it, which means that I think stocks are out of the question because stocks are more of a long term thing. A treasury bond would be nice since it's almost a sure thing and you can get your money back at any time, but I haven't ruled out something like an index fund or an ETF yet.
    Good, glad to hear you not only have a goal, but a timeline for that goal in mind. A realistic time frame is everything in investing. For your time frame the best tool for you may be something you already have, a Paypal acct. Technically, the cash balance in a paypal acct is a prime money market fund. They outsouce the management of that fund to Barclays I believe, a very respected manager. I actually run a small money market fund (though one suited to large institutions) and I use paypal for my short-term investments. The rate is good (5.04% annualized 7-day rate... subject to change with market conditions of course), but I use it for convenience. No acct minimums, easy to link to a checking acct, no fees, electronic statements, etc. Not to mention it is easy for paying for bike parts. And for a plan like what you want, convenient is good. Every paycheck you can just log in and send some cash. Something you may want to think about.

  19. #19
    Pedaled too far. Artkansas's Avatar
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    Quote Originally Posted by DXchulo
    What do you guys do with the money you save?
    I'm paying off credit card debts run up during my marriage.

  20. #20
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    Investing it in growing my business which is all about saving fuel and energy. My biggest savings hasnt been money so much as time. When I went car free and changed jobs to a bike dependent one I cut my weekly hours by 10 and my commute time is now essentially zero. Intially it was about an 80% paycut forcing extra part time work, but that only lasted about 14 months, I have people working for me now, thats where much of the savings is going now.

  21. #21
    Hippykid
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    Quote Originally Posted by DXchulo
    What do you guys do with the money you save?
    Pay Dentist Bills!!!

  22. #22
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    It is absorbed by the monstrous beast named FINANCES.
    What little I get to use is funneled into cycling gear and clothing.

  23. #23
    meep! legot73's Avatar
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    I use the money I save from getting rid of my car in two ways:

    1) Weekly gas money savings counts towards my bikes and clothing. At this point, one bike is "paid for" when including the bike I sold to put towards it.

    2) Ownership expense budget (plates, insurance, routine maintenance, excluding major repairs) go towards my kids' activities for ballet, piano lessons, soccer, Audubon membership, etc.
    Nothing says "in good times and in bad" like a good pair of fenders

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