Recently I asked for your money questions on Facebook and received a number of great inquiries. I discussed as many as I could (in 5 minutes) on ABC NEWS NOW earlier this week. In case you missed it I have my  responses below.  The link above will also take you to the online video.

Thanks again for participating!

You can send me your questions via Twitter and Facebook or via email: farnoosh@farnoosh.tv
 

Lisa from Philadelphia asks: My husband gets a pretty big bonus each year, anywhere from about 20k – 30k. what is the smartest thing to do with that, as a young 30 something couple? where do we invest? how?

Assuming no credit card debt, it’s really up to Lisa and her husband’s goals. Ultimately you want to do something with this money that’s going to give you a nice return on investment. If you want to be strategic in the stock market I’d say get a financial planner to help you put together a nice diversified portfolio that’s staged for retirement and college for your kids. or a financial planner. I would begin by asking around for referrals from coworkers, friends, family, etc. Have a few interviews. It’s important you ultimately find someone you like and trust and who respects your goals. Fpanet.org is the Financial Planners Association’s web site.

Stock market aside, you may want to put some money towards outstanding loans like student loans, car loans, personal loans to get rid of those monthly payments, boost your credit rating and shore up cash.  Also – how’s your rainy day nest egg? Do you have at least 6 months set aside for your living expenses in case of a job loss or in case this bonus doesn’t come in the mail next year? Fill that gap if you haven’t. If you’re covered then you may want to save every penny of that bonus for a future down-payment on a home or home renovations.

Another thing to think about – because this is a couple in a their early 30s – if you want to have children in the next few years put some of that money away for baby-related expenses. A lot of new parents underestimate the cost of having a baby – from medical to child care to all the baby gear. I’m throwing a lot of options out on the table, I know. I get excited when someone asks me how to put their money to work! 

Emmett from Las Vegas asks: Do you think it’s fair that jobs and apartments are now being affected by credit rating? As a financial whiz don’t you think this will create an endless poverty cycle that this country will never recover from?

Personally, I think it is acceptable for landlords and hiring managers to look at your credit report. Hey, they’re trying to cover their own butts and make sure employees/renters are stable and reliable, right? And by the way this has gone on for decades. That said, I don’t think a poor credit rating should be the main reason not to grant someone a lease or a job. For landlords who don’t think a renter is financially stable they may want to consider contracting a month-to-month lease (if you fail to pay, auf viedersen!) and/or require a few extra months of rent upfront. Meantime employers should be open to hear the whole story behind an ugly credit report. For everyone else it’s really important to you know your credit standing ahead of any type of review from a potential landlord or employer. You can get a free report from the three main reporting agencies every year at annualcreditreport.com. If you know you have a poor credit rating, it’s good to make it known and be upfront and explain why and how you’re coping. 

Liz from Chicago asks: I’m always confused by options for retirement investments. How much of my paycheck? Where do I put the money? What are my options if I don’t like my employer’s investment plans? Where can I get affordable and sound investment advice?

If you’re in your 20s and early 30s  (which Liz is) aim to contribute around 10% of your annual gross income to your company’s 401(k) plan. If 10% is a total stretch, you should at least contribute what your employer matches. Most 401(k)s offer a variety of stock funds and bond funds, in addition to your company’s individual stock. You want to spread out your allocation to maybe 5 to 7 different stock funds varying from small to mid to large cap, in addition to a bond fund. Really the idea is to get a mixed bag with no more than 10% allocated towards your company’s stock. Remember Lehman Bros.?  Additionally open up an individual retirement account or IRA. This is another way to save for retirement and here you may have more control over what investments you want in that account. You can’t invest as much in an IRA as a 401k but like the 401k, the IRA offers tax-deductible benefits.

Aaron from Burbank, CA asks: I would like to hear more about what my credit union calls a “tax smart loan” basically a loan secured by the car etc, and recorded on the property.

Some banks are now offering tax smart loans, which allow borrowers to get a tax deduction on the car loan’s interest payments. The loan is borrowed against your home equity. The big risk is that in order to qualify for the tax deduction a lien is placed on your property so if you fail to pay the loan you could lose your home in addition to your car. Also there may be some additional up-front costs associated with tax-smart loans. You have to really compute the math to see if the tax deduction savings is worth it.

Nicholas from New York asks: What’s the best way to fire your financial advisor? Are there things you should put in place prior to letting he or she know they are getting the boot?

Breaking up is hard to do! But you’re not alone in this case, I bet. First things first, do some digging around. Get a copy of your most recent account statement to learn exactly what is in your account and what you own. See how your portfolio’s been shifted recently. Then schedule an appointment to talk things through. Sit down with your advisor to see where his or her head’s at. Discuss your portfolio and the moves that have been made. If you have questions or concerns let them be known. If after this meeting you still feel like this isn’t the best relationship, then say you’d like to take a break. Maybe explain you can no longer afford the fees. However you choose to break the news is up to you. But don’t take this too personally. It’s business. If you have funds under management, you can move them with help from your new advisor.