- I just came to a settlement after a hit and run. After all was
said and done, I'm physically okay and got about $50,000. I don't
have outstanding medical bills, but I do have some credit card debt
and a car payment. I'm also currently unemployed, as my former company
downsized and cleared out the marketing department. Any advice for
how I should use this money? - Josh
Hi Josh - Glad to hear you're doing well! I've got a few
thoughts about how you should allocate those funds, and I think
we should look at your situation chronologically.
expenses. The last thing you want to do is go on a spending
spree and blow through $50,000, especially since you're not currently
working and you don't want to become overleveraged. You should
pay off the credit card debt immediately, because that will reduce
your monthly payments. After that, spend as little as possible
while you look for your next job. I suggest waiting to make big
investments, while you're currently unemployed.
2. The next step. While I don't want you to spend flippantly,
I'm okay with you investing in your profession. Is there a course
that will help you earn a higher paying position with another
company? Can you purchase software that will enable you to work
freelance and start bringing in income right away? Marketing is
an excellent and competitive field, and you could have a great
opportunity to get ahead. There's a fine line to walk with a windfall
like this; you don't want to spend money while you're not generating
income, but investing in yourself is usually the best way to increase
your future earning potential.
3. Investing in the future. Have you been receiving unemployment
since getting laid off? If you have money coming in that covers
most of your bills, you should be safe to invest around $5,000.
Once you're working again, I'd invest another $10,000 or so. You
can put this money in a dividend-paying stock, or use Betterment.com
if you want a company to guide you. Stay away from mutual funds
and bonds for now and go with an option that won't crush you with
fees. You can use this time to learn about the stock market and
investment options, and then when you're back at work you'll be
ready to get your money moving.
| While you think
about your next move, try to keep $45,000 in the bank. Pay off your
credit card, invest a small amount if you're receiving unemployment,
and see how quickly you can find a good job. After your career gets
back on track, you can start having fun with your investing. Good
© Taylor Kovar
June 29, 2018
More "Go Far With Kovar"
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