Hello r/personalfinance,
Backstory: I am a 21 year old male living in Seattle, moving to LA. I dropped out of college with 1 year left (Applied Physics major, 3.0 GPA) after developing a passion for entrepreneurship and having success with my current business. This is my third business, first one failed, second one sold for $2.3k 2 years ago, this one is 19 months old and I have a buyer for a lump sum $30k up front. The business is worth $80-100k but this buyer fell in my lap and I have started another business with friends that has more potential, is more exciting, will be less work, and has $20k in the bank. I honestly just want to take what I can get and move on. It is also a local business which can be difficult to find a buyer for.
Current Financial Situation: $6k in credit card debt from business ($4.8k with 15.9% APR, $1k 0% APR for next 12 months). Owe $2k in sales taxes to WA state. Owe $3k in other business loans (provided by payment processor, they took 15% out of sales every day) that will need to be paid at the time of sale. $9k left on car, 4 years left at 6% APR. No retirement or investment accounts.
Total Debt: ~$20k
I also drive for Uber/Lyft on the side and net ~$2k/month.
Future Plans: I worked my ass off building this business, lost out on a lot of experiences, lost my girlfriend, dropped out of school, stressed out constantly about debt, etc. so now I do want to reward myself a bit. I would like to travel to Japan, Korea, Vietnam, and Thailand for a month right after the sale as I haven't traveled much and want to see the world. I want to be comfortable on a budget (stay in hostels, spend money on restaurants/bars/tours/etc.). When I return I will be moving to LA to work on my new business. Fortunately the company will be paying rent for us in a modest house; we have enough funds to last at least 8-12 months. I will have to pay other living expenses (food, gas, insurance, etc.). I should be able to have a stipend of $1-2k in roughly 3-6ish months from the business.
I plan to give myself 2-3 years of grinding at entrepreneurship before considering going back to school. If I fail, my final year of school/rent will be paid for by my parents which I am very grateful for.
Just trying to figure out how to best allocate these funds. I definitely want to pay off my credit card debt and will be only using the $1k 0% APR credit card for now as I get 2% cash back. I also need to pay off all other debts besides my car which leaves me with $19k. I would like to set up a Roth IRA, should I max out this year's contribution? Plan to invest in some basic Vanguard index funds. I also need to set aside a budget for my trip to Asia. I would also like to leave $5k in a savings to use for my business if we need it.
Basically just don't know how to best use this money. I want to set myself up to work on my businesses without constant stress about debt. Any and all help is greatly appreciated.
Submitted October 29, 2018 at 05:19AM by HeshSaint https://ift.tt/2yEiVZr
