Hi. My name is Matt… and I’m an investor. (“Hi Matt.”)
- Yes I have begun investing.
- Yes I still have debt.
- No I have not abandoned my stance on debt reduction before investing.
- No I have not slowed my aggressive debt reduction strategy.
So what gives?
Why did I begin investing while still in debt?
In a sentence… to better prepare myself for my future as an investor.
There is no doubt that debt repayment is the best investment opportunity currently available to me, and that is why I continue to use all available funds to do just that. Well, all available funds with the exception of $600 and all Lending Club affiliate earnings.
Where am I investing?
1. Index Funds with Schwab.com
A few days back I moved $600 of my side hustle earnings into my Roth IRA Account with Schwab who allows beginning investors to start investing with $1,000 or less. I did this for several reasons:
- I cannot max out my 2009 Roth IRA contribution this year, but wanted to contribute at least something… so I did.
- Schwab has very low mutual fund investment thresholds, and I wanted to take advantage of the opportunity while it still exists.
- I have turned myself into an avid student of investment theory and wanted to use actual money to put that knowledge to practice.
- I wanted to get my basic portfolio diversification strategy in place so that when I am ready to invest regularly I can just initiate automatic contributions and stand confident behind my choice of funds.
With help from my friend and blogging colleague Mike Piper (aka The Oblivious Investor) I chose a modified (index fund) version of #7 of these 8 lazy etf portfolios:
- 30% in Schwab S&P 500 Index Fund (SWPPX)
- 30% in Schwab Small-Cap Index Fund (SWSSX)
- 30% in Schwab International Index Fund (SWISX)
- 10% in the Schwab Total Bond Market Fund (SWLBX)
2. Lending Club Affiliate Earnings
Investment portfolios are not the only thing we should be diversifying! Our income should be diversified too. I hold to this philosophy when monetizing Debt Free Adventure by using as many revenue sources as possible.
One of those revenue sources is Lending Club. Each month, the earnings from Lending Club are simply deposited into my Lending Club investors account where then put them to work accordingly.
- I currently have $300 invested in Lending Club notes and hope to see this amount increase nicely over the next few years.
If I had less debt and more cash flow I would be investing much more with Lending Club. My confidence in LC as an investment vehicle grows as I watch seasoned investors continue to make great returns on their money month after month.
I you are interested in investing with Lending Club:
I hope to realize some decent returns from my Lending Club investment while my Schwab Roth IRA account is more of a placeholder for now. I should also add that neither of the amounts used to fund these investments were taken from our budget; they were taken from my side hustle earnings, allowing me to fund the investments without having to alter our existing budget in any way.
Any thoughts or opinions on my decision to begin investing?