my trainer

[cellboy]

1. Called and said to forgo the last half of payment due him, since I missed last week. How nice, but I will pay him something.
2. We start workouts tomorrow
3. His uncle is sending him $8000 (money owed or some estate thing). He asked me if he should pay off his car
4. I told him don't put all the eggs in one basket. Maybe pay his car with his pay checks, and add some from the 8K. That way he can pay off his car faster. Why pay the whole bunch off (8K), on an item that is depreciating every day.
5, Then he can invest some of it in a no risk CD, money market, and save for a rainy day
6. Since this money is coming from the UK, I wonder if he will be taxed?
7. I hope that was the right thing to tell him. He needs to buy a computer first!

Comments

[otterdaemmerung.livejournal.com]

I'd personally suggest that he pay off his car first.
Yes, it is indeed depreciating and a CD would earn interest, but think of the interest on the auto loan that could be saved if the term of the loan is reduced -- and which is a higher rate than the interest gained on any CD.
Or, in other words: paying a loan off early to minimize the interest paid is worth more than gaining a tiny sliver of interest on savings and letting the loan run longer.

[cellboy.livejournal.com]

Yeah. I figured that too. He is cash poor though. And it would be nice for him to have some in the bank. So guess it is up to him. Or maybe pay most of it off, and keep some $$