Not Broke

This past weekend, Ikea Houston held a fabulous 62 hour sale, with everything at a 10% discount.  And I didn’t go.

This may not seem like an act of extreme resistance -but it was. Believe me. I love Ikea and I love spending money at Ikea – but I kept reminding myself of the ridiculous debt and the sad fact that I’ve lost like a 100 bucks in the stock market already.

I was ready to just sell it all and wipe it out as a loss -but then I watched Suze Orman on CNBC this weekend. She said stocks are meant for people who have ten years or more to invest. Okay. So let’s just wipe out the get-rich-quick mentality and start over. I’ll keep my stocks for ten years… ish. Or maybe I’ll just pull out when I break even…

Okay. Nobody said I had to get it right the first time.  

Possible mistake 1: Sharebuilder. I think Sharebuilder is frustrating. But I still may stick it out, because I don’t know if the other companies will let me build shares by putting a little money in like 25 or 50 dollars a month towards an ETF or something.

Zecco.com is offering $0 trades. ZERO! The catch is that I have to have a balance of 2,500 in my account with them. But that’s doable… for now. 

Possible mistake 2: Investing before clearing out the credit cards. I know from the wise Suze Orman, that when faced between paying off credit cards and investing in 401k – go with the 401k. But I’m not investing in a 401K. I’m just investing. In something.  Glah.

I don’t know what I’m doing.

A good thing I did: getting my FICO Score. It helped me put reality back into my life. I mean, today I almost charged my Discover card to buy the Weeds Seasons 1-3 Box Set.  Wtf. I already saw each of those episodes. AND they’re all online.   Still. The temptation was real. But I got over it. That stupid score kept flashing in my head. I have to get it up. I have to.

So the appeal of a 4 dollar stock commission was too good to be true. Well, sort of.  I mean, I knew going into it that the 4 dollar trade was only valid on Tuesday. But I didn’t know that it had to be planned in advance.  It’s not “real time” Tuesday trades. It’s trades planned for up until markets open on Tuesday type trades.

I don’t know. I’m confused.

Anyway, I suppose that’s a good thing because I really have no idea what I’m doing.

BUT – JP Morgan went up another 2.93!!! Can you imagine if I had bought a 100 shares? Instead of just one little one? UGH.  I don’t know if it’s the shopoholic in me or if I’m geniunely thinking straight here -but I kinda just want to screw the rest of my checking account and buy more JPM. I mean, congress will pass the FDIC bill on Friday. That gives more faith in banks. That means banks go up.

I think.  Or maybe I should just be thankful that my one risky move isn’t cutting me open. Maybe I shouldn’t be too greedy.

Well. I have about six days to play around the ETF’s and try to figure out what to put my monthly investment in.

I should probably also try to figure out what exactly the benefit of ETF’s are…. ha.

All the talk about the financial crisis made me look up how much of a crisis I was currently in. I knew it was bad, but I guess I never realized how freaking bad it was. I mean, when you log on to your little credit card account and see that you owe them 3,000 dollars – you think, bad… but not scary-bad, right?

Wrong. I did an assessment of all the money that I owe to various credit cards and student loans. My knees buckled. Here’s a summary of the damage:

• I have $20,886 in college loans and payments begin in November.
• I have a balance of $910.00 on a Master Card, and $3,385 on a Discover Card.
• Now here’s the best part: There is only $1,151.86 in my checking account.   
• This makes my total debt a whopping $24,029.14 – yes, I almost cried.

So I woke up this morning and immediately took action:

1. Opened an Automatic Investment Account. Okay, so this first move I made was probably not the wisest, because the whole point is to pay down my debt, not buy more stuff. But here’s the deal – yesterday the market plummeted almost 800 points! How could it NOT go up? I realize I have no knowledge of the stock market, but after watching it crash, and all the news media going nuts over it, and commentators talking about how small businesses are going to suffer – I figured congress would eventually get their act together. That, coupled with the fact that both presidential canidates want to see some legislation go through, meant that investors would have SOME confidence about the markey… and it would rally. I was right.

But here’s the thing. I have no money, as I mentioned. So I only bought 2 shares. 1 share of the S&P 500 and 1 share of JP Morgan. I bought the S&P one because everyone says it’s a reliable investment overtime. And JP Morgan seemed like a good idea because they bought out WaMu. I don’t really know how that makes sense but it felt right.  So that cost around 180 with commission.

Then, I realized, that with Sharebuilder, I didn’t have to buy a whole share. I can invest as little as 50 dollars and invest in a percentage of a share. For example, the S&P 500 was around 114 this morning. Instead of buying a whole share, it allows you to buy as little as five dollars, or about 28% of 1 share.

Anyway. So The PortfolioBuilder tool suggested I invest in iShares Lehman Aggregate Bond and SPDR Trust, Series 1 – which is actually one of the shares I bought. Sort of amazing that a girl who doesn’t know anything picked the same stock that the ING Direct Sharebuilder tool thing did.  Or maybe not so much amazing as it is scary…

2. Found out my FICO Score  – this is one of those things that I knew would be hard to look at, so I never bothered to figure out what it was. But I decided to just do it. I was right, it was bad. The last time I looked a few years ago it was around 730. Now? My three-report-avg is 613.  *sigh*

The good news about looking at the reports was that I noticed about four or five errors. So maybe once I send out some dispute letters to various reporting companies, my score might go up. I was also able to figure out when I can see the light at the end of tunnel for my FICO score.   Sadly, if I only put down 200 a month towards it, my socre will only be okay around 2010.   TWENTYTEN. That’s pretty rough.  But that’s really I can do for now.

3. Opened up a high-yield Automatic Savings Account. I went with ING Direct (Sharebuilder) here too. Not because they have the highest yield, but because they seemed like the least amount of hassle. With an “Orange Savings Account” I don’t have have to pay the extra five dollars in real trade commissions if I don’t have the money in my MMA. 

Oh -and if you are even slightly thinking of getting a Orange Savings or Checking Account – please email me. I can give you a referral link that will give you 25 dollars if you open an account with 250 dollars.  I get 10 bucks, you get 25. It’s free money. !