Got a Grand to Spare? Some Tips to Spending it Wisely

Posted by Elizabeth Halpern | Posted in Credit Report | Posted on 26-10-2010

From an article in Money magazine, following are a few money-savvy ways to spend $1,000:

  • DRIP – A DRIP investment plan lets you, the investor, purchase shares in a blue-chip stock directly from the company. So, if you’re thinking about gifting a grandchild with $1,000, give a few shares of a child-friendly stock; think Disney, Mattel or Coca Cola.
  • Reduce Credit Card Debt – When you pay down your current credit card balance by $1,000, you are actually realizing a 14% return. Try finding another investment that gives you that return!
  • Create a Diversified Portfolio – At some brokerage firms, i.e. Schwab, you can open an account with $1,000 and purchase exchange-traded funds with no commission. Be sure to diversify.
  • Dispute Your Property Tax Bill ¬– If you live in a high-tax area and if your home value has taken a significant hit, you might be able to save yourself a sizable amount by contesting your latest property tax bill.  Whether you go it alone in what often ends up being a frustrating and time-consuming battle or hire an experienced real estate lawyer or a property tax appeal expert, you could reduce the amount you owe for property taxes. Even if you pay an expert 25% to 50% of your initial year’s savings, you will come out ahead. With the money you save, you could splurge on a night out or use it to further pay down your credit card debt (see 2nd bullet point).
  • Increase Your Long-Term Disability Coverage – According to the Society of Actuaries, working Americans age 25 to 65 have an almost 1 in 5 chance of becoming disabled for a year; many are inadequately insured against those odds. One financial planner opines that most people should have coverage that replaces 60% to 70% of their income in the eventuality of a long-term accident or illness. If your employer provides insurance at the 60% level, but with a cap of $5,000-$10,000/month, depending on your income, that could leave you with a sizable salary shortfall. Although premiums will vary considerably depending on your age, health, job and location, a policy costing about $1,000 annually could net you peace of mind as well as extra income should an emergency arise. Ask friends for a reputable insurance agent or go to nahu.org. 
  • Take an Investment Class at a Local College – Check out the websites of schools near you to find moderately-priced classes.
  • Attend a Conference – For a moderate fee, attend an investment forum in your area.

Read Books on Investing – The article recommends Against the Gods by Peter Bernstein, The Big Short by Michael Lewis, The Intelligent Investor by Benjamin Graham and The Myth of the Rational Market by Justin Fox.  Also, a personal must-read, A Random Walk down Wall Street by Burton Malkiel; available for a modest cost at your local bookstore or Amazon.com. Even better, check them out for free at your town’s public library.If your investment portfolio has bottomed out, taking with it your hopes for a secure financial life, consider filing Chapter 7 or Chapter 13 personal bankruptcy. But don’t consider filing without an experienced and knowledgeable bankruptcy attorney from Legal Helpers. For your free initial consultation, call 800-260-1402 or log on to www.legalhelpers.com. 

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