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This is for my parents, but my old man's too stubborn to ask himself.
Currently my mother came into $45k via profit sharing, and is out of work due to surgeries. My father is now the sole earner and paying the mortgage himself and can barely stay afloat.
He has 1 car payment, a motorcycle payment, gas, electricity, water, he usual.
I dont know the exact amount he pays but I know he just barely scrapes by.
They owe 7k on the car, and im not sure about the bike. The car now has a hole in the oil pan, needs tires, will need a tranny pan soon, usual car problems and he can't afford them.
He wants to put the 45k into an IRA. I think that's a poor choice. I think he should pay off the car, and sell it and use that money to buy another outright, that way he owns it and saves a monthly payment. Then take the remainder of the 45, and invest that.
My mother agrees with me but she let's him make all the financial decisions.
I think investing right now, with the way the world's going (possibly another world War eventually) is a huge gamble.
But im not expert and thats why im here.
I've just watched my parents struggle to get by for so long, I can't sit by and watch them struggle more, I want to help them but to my father, i dont know what I'm talking about.
So maybe someone here can give me some advice in a way I can explain it to him easily, so he will understand and now be so hesitant to listen.
I know the lack of details may make this difficult to advise on, but something is better than nothing. I dont want them to lose the house.
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good idea op. buy used, pay cash. if you are in an urban market, check to see if you can get an affordable vehicle (under 5k ideally) that will work with a ride-sharing platform; another tack is to find a light truck or SUV that gets good mileage and then pick up moving or hauling gigs, so that way you and your dad, or either of you individually, can make some cash on the weekend as a side gig. my middle class family had to make a lot of economies and change behaviors, but they were able to hold on to the house for another decade longer than they would have otherwise been able to do because they started being smart about their situation. also, use some of that money to set up a greenhouse or garden to grow fresh food. you'll save money on food, and be healthier in the long run.
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>>1967372
In the abstract, he should pay off the car, which would not only save some interest expense, but also make his cash flow better. He should also sell the motorcycle and get rid of that payment. And put whatever remains into a sensible investment. (And by sensible, do remember that IRA investing is for the long term, which means you should try not to let the worries of today prevent you from investing when you have the money to invest.)
I did say "In the abstract". Perhaps the motorcycle is the only joy he allows himself in life, so it's not quite as cut & dried as I made it seem. But more importantly, some people, when they run into a windfall, should lock it up in a place where it's harder to get to -- otherwise the temptation's just too much to spend it. Is your dad the sort that might take $25K and just get a nicer more expensive bike? Consider the possibility that your parents know themselves better than you do.
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OP here.
My father is very sensible, and I know he wouldn't take that money to buy material goods he doesn't need. He has considered selling his bike, but as you said it really is some of the only joy he gets. And truthfully he deserves it, hes the only reason my families not in a shelter, and has been that reason for the past 29 years of my life.
If he lost this house it would be the 2nd house he lost to foreclosure, and it would ruin him. He's over 50 now and and carpenter, and it may only be another few years before he does retire, and I dont think he'd gain enough interest to make a difference in that amount of time.
He does make good money, somewhere near 2k biweekly. But that money leaks out like the BP oil leak.
A $20 bottle of Jaeger almost every night, about 100 in weed every 2 or so weeks, car payment, bike payment, my mother has a scooter she doesn't ride and pays for. And now he's about to shell out a couple grand to rebuild the front porch.
I think he's honestly just trying to ignore the debt. Trying to pretend it doesn't exist so he doesn't get depressed and end up worse off.
But this is finance not psychology.
I dont know why he's so against owning a car rather than paying for one, ive been on him about that for years.
Is it risky to invest right now? Maybe in stocks and bonds or something? I've been told if you buy stocks in food products, you cant lose. But again, I'm no expert. Hell im posting this from my unemployed ass on a couch.
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>>1967600
>$20 bottle of jaeger every night.
What kind of alcoholic drinks jaeger?
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>>1967600
>A $20 bottle of Jaeger almost every night, about 100 in weed every 2 or so weeks, car payment, bike payment, my mother has a scooter she doesn't ride and pays for.
Well, yeah, that does put a different light on it. But I doubt you'd change that behavior much if you tried, except maybe encouraging selling the scooter.
>I think he's honestly just trying to ignore the debt. Trying to pretend it doesn't exist so he doesn't get depressed and end up worse off.
>But this is finance not psychology.
Personal finance has to take into account personality and other psych factors. And yeah, that's how people often get into and stay in debt.
>Is it risky to invest right now? Maybe in stocks and bonds or something? I've been told if you buy stocks in food products, you cant lose.
If the investment is for the long term, like an IRA, try a mutual fund that balances risk and low volatility. Something like Vanguard's STAR fund
https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0056
There's a bunch of alternatives, but this one balances stocks & bonds so a little market volatility won't scare the shit out of beginners. And Vanguard's a great place to put your money in terms of low fees and consumer orientation.
It's not that you're that wrong about consumer stocks, by the way, but you want to start off being more diversified than that.
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