U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Economics > Investing
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 02-19-2013, 07:01 AM
 
72 posts, read 85,637 times
Reputation: 10

Advertisements

I bought my house about 2 years ago for 200k, borrowed 192k


My interest rate is 3.25% and its a 30 year FHA.
Mortgage (prin/interest/taxes) is 1535 a month.
I'm 28 years old.

Lets say I have 500 bucks at the end of the month for whatever I choose (already paid bills, put money into savings).


Do I put this money towards my mortgage, roth ira, or a general investing account?
Reply With Quote Quick reply to this message

 
Old 02-19-2013, 07:06 AM
 
Location: The Triad (NC)
26,831 posts, read 57,830,396 times
Reputation: 29215
Quote:
Originally Posted by fieldsy1024 View Post
Lets say I have 500 bucks at the end of the month...
Do I (X) ... or (Y)
You do both. And (Z) as well.

The basics (one more time):
Start with the filling up the emergency fund.
Then max out the employer matched 401K.
Then max out the tax exempt IRA.
Anything set aside for the kids college expenses? An organized 529?

Still have some of that loose cash? Budget a weekend get away trip a couple times a year.
How is the house holding up? Have the new roof/furnace cash on hand?
(no... the emergency fund isn't for that)

Get into the groove, nose to the grindstone and maintain for a couple of years.
THEN... you can start looking into other investment options.

Last edited by MrRational; 02-19-2013 at 07:19 AM..
Reply With Quote Quick reply to this message
 
Old 02-19-2013, 07:10 AM
 
Location: Texas
42,204 posts, read 49,740,662 times
Reputation: 66975
Well.
Funny you ask.
I had the same question.
Right now, my mortgage rate is 2.8%.
My return on investments last year was 10%.
In fact, it was 6% just in the first six weeks of this year.
On average, it's always higher than my mortgage rate.

Then you must analyze the rate of inflation and decide if your dollar today or your dollar in the future will be worth more.
The answer is almost always the dollar today...close to the rate of inflation, it's questionable if you should pay down your mortgage early when you could use the more powerful dollar to involve yourself in investments that will garner you better returns.

I currently have zero interest in prepaying my mortgage.
Reply With Quote Quick reply to this message
 
Old 02-19-2013, 07:14 AM
 
2,393 posts, read 4,856,485 times
Reputation: 4511
Does your employer match 401k contributions?

If so that is the first place to put available cash.
Reply With Quote Quick reply to this message
 
Old 02-19-2013, 07:19 AM
 
72 posts, read 85,637 times
Reputation: 10
Quote:
Originally Posted by rational1 View Post
Does your employer match 401k contributions?

If so that is the first place to put available cash.
They pay 50% of the first 8% I put in there, so I put in 8%.


Stan....so your answer would be invest right?
Reply With Quote Quick reply to this message
 
Old 02-19-2013, 07:22 AM
 
Location: Texas
42,204 posts, read 49,740,662 times
Reputation: 66975
Quote:
Originally Posted by fieldsy1024 View Post
They pay 50% of the first 8% I put in there, so I put in 8%.


Stan....so your answer would be invest right?
Well, your interest rate is a little higher than mine.
You SHOULD ABSOLUTELY max out your tax-advantaged retirement contributions before you do anything else.
You have an emergency fund?
Reply With Quote Quick reply to this message
 
Old 02-19-2013, 08:14 AM
 
72 posts, read 85,637 times
Reputation: 10
Quote:
Originally Posted by stan4 View Post
Well, your interest rate is a little higher than mine.
You SHOULD ABSOLUTELY max out your tax-advantaged retirement contributions before you do anything else.
You have an emergency fund?
I have about 6-7k in savings that I put 400 a month towards it.


I can put in 25% of my pay for my 401k but my company just pays 50% of the first 8% I put into it, so I just put in 8%.
Reply With Quote Quick reply to this message
 
Old 02-19-2013, 08:28 AM
 
Location: Wouldn't you like to know?
9,113 posts, read 15,296,085 times
Reputation: 3661
ROTH IRA and up to the employer match in your 401(k) absolutely.....

Make sure emergency fund is shored up and take care of all other debts.....
Reply With Quote Quick reply to this message
 
Old 02-19-2013, 09:29 AM
 
72 posts, read 85,637 times
Reputation: 10
My order goes pretty much like this

pay debt
401k
savings
mortgage
bills
roth ira/gen investing
Reply With Quote Quick reply to this message
 
Old 02-19-2013, 09:31 AM
 
Location: Texas
42,204 posts, read 49,740,662 times
Reputation: 66975
Errrrgh...I'd max out any retirement you can. You're almost throwing money away not to do that.
It not only comes out pre-tax (well, not every vehicle), but the GROWTH is tax-free. That adds up over the years.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Economics > Investing
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top