Did I Give The Right Advice? – Real Life Situation

I think this is going to become a new series for me. At least until friends stop telling me about their financial issues.

I gave a friend some advice yesterday. I am not sure if it was the 100% proper advice, but I think it was good. Keep reading and let me know.

Real Life Situation

$2,000 in IRA
($10,000) in credit card debt at 4.3% interest (24 month introductory rate)

Should she take the money in her IRA out and pay off some of the debt.

Other things to consider: She is currently paying down the debt an extra $500 a month. My guess is that it will be 15 months and they will be debt free.

My Advice

I told my friend that she should either not touch her IRA or consider converting it to their Roth if they were annoyed that it was sitting in a traditional IRA. I thought that completely pulling it out was a bad idea because of the 10% penalty for pulling funds out of an IRA.

She responded to this advice “it would only cost $200 to pay off $1800 in debt”. While technically correct, I rephrased it for my friend. I said, “if it was $200 for $1,800 or $200K for $1.8M, it shouldn’t make a difference. 10% is 10% and thinking like an economist, the person should try to optimize every dollar they have or will receive.

So how did I do? Is this what you would have advised?

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Did I Give The Right Advice? – Real Life Situation

I think this is going to become a new series for me. At least until friends stop telling me about their financial issues.

I gave a friend some advice yesterday. I am not sure if it was the 100% proper advice, but I think it was good. Keep reading and let me know.

Real Life Situation

$2,000 in IRA
($10,000) in credit card debt at 4.3% interest (24 month introductory rate)

Should she take the money in her IRA out and pay off some of the debt.

Other things to consider: She is currently paying down the debt an extra $500 a month. My guess is that it will be 15 months and they will be debt free.

My Advice

I told my friend that she should either not touch her IRA or consider converting it to their Roth if they were annoyed that it was sitting in a traditional IRA. I thought that completely pulling it out was a bad idea because of the 10% penalty for pulling funds out of an IRA.

She responded to this advice “it would only cost $200 to pay off $1800 in debt”. While technically correct, I rephrased it for my friend. I said, “if it was $200 for $1,800 or $200K for $1.8M, it shouldn’t make a difference. 10% is 10% and thinking like an economist, the person should try to optimize every dollar they have or will receive.

So how did I do? Is this what you would have advised?

1,396 Responses to Did I Give The Right Advice? – Real Life Situation
  1. homedesignakron.tk
    July 16, 2018 | 10:22 pm

    Nice post. I was checking constantly this blog and I am impressed! Very helpful information particularly the last part 🙂 I care for such info much. I was looking for this particular information for a long time. Thank you and best of luck.

  2. pussy
    July 17, 2018 | 12:13 am

    Say, you got a nice blog.Really thank you! Cool.

  3. خرید تار
    July 17, 2018 | 2:00 am

    thank you17

  4. خرید سرور مجازی ارزان
    July 17, 2018 | 2:02 am

    thank you17

  5. carpet cleaners surprise az
    July 17, 2018 | 2:04 am

    Really informative post.Really thank you! Will read on…

  6. tonbak
    July 17, 2018 | 2:06 am

    thank you19

  7. http://www.homedesigncary.tk
    July 17, 2018 | 2:10 am

    Good post and straight to the point. I am not sure if this is actually the best place to ask but do you people have any thoughts on where to get some professional writers? Thx 🙂

  8. Car Shopping Tips
    July 17, 2018 | 2:52 am

    I went over this internet site and I believe you have a lot of fantastic info, saved to fav (:.

  9. http://www.homedesignarvada.tk
    July 17, 2018 | 4:23 am

    I cling on to listening to the reports lecture about getting boundless online grant applications so I have been looking around for the best site to get one. Could you tell me please, where could i acquire some?

  10. everyone loves information
    July 17, 2018 | 5:29 am

    You completed a few nice points there. I did a search on the matter and found a good number of folks will go along with with your blog.

  11. animal shelter
    July 17, 2018 | 6:28 am

    Thank you so much for giving everyone an extraordinarily terrific opportunity to check tips from this blog. It is usually so nice and also stuffed with a lot of fun for me and my office fellow workers to search your blog really 3 times every week to read the new issues you will have. And lastly, I’m just usually amazed considering the unique creative ideas served by you. Selected 4 points in this posting are easily the most suitable we have had.

  12. cat adoption
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  13. Wow, fantastic blog layout! How long have you been blogging for? you make blogging look easy. The overall look of your site is magnificent, let alone the content!. Thanks For Your article about sex.

  14. Dovie Kilogan
    July 17, 2018 | 6:33 am

    My developer is trying to convince me to move to .net from PHP. I have always disliked the idea because of the expenses. But he’s tryiong none the less. I’ve been using WordPress on various websites for about a year and am anxious about switching to another platform. I have heard fantastic things about blogengine.net. Is there a way I can import all my wordpress content into it? Any help would be really appreciated!|

  15. Leandro Mathey
    July 17, 2018 | 7:01 am

    Thanks for sharing your thoughts on meta_keyword. Regards|

  16. homedesignboston.tk
    July 17, 2018 | 8:40 am

    As a Newbie, I am permanently exploring online for articles that can be of assistance to me. Thank you

  17. Incredible! This blog looks exactly like my old one! It as on a completely different topic but it has pretty much the same layout and design. Great choice of colors!

  18. paypal nigeria
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  23. Alexander Danielian
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    Greetings! Very helpful advice within this post! It’s the little changes that will make the most important changes. Many thanks for sharing!|

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  1. کنسول جستجوی گوگل
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