What would you do if you had an additional $1300 a month to put away?

[thrifted]

What would you do if you had an additional $1300 a month to put away?

I am maxing my retirement contributions with TIAA CREF (my work puts in 8% of my pay without having to match), paid off my car, paid off my student loans, paid off my credit cards and have an emergency fund already. Currently, I'm keeping the money in a regular old credit union savings account. But I'm thinking about applying it towards the principal of my new home, or putting it into my TD Ameritrade account and investing in ETFs, or buying government bonds. I am 41 and plan to retire at age 50.

All recommendations and constructive criticism welcome! Aaaand... GO!

:)

[secondcor521]

Try https://forum.mrmoneymustache.com/investor-alley/investment-order/

[Dee_the_third]

Me, personally? Probably chuck it in taxable, since our mortgage rate is <3%. But we have no debt and are maxing out any tax-advantaged space we have already. 

[ixtap]

Personally? Chuck it into VTI in a taxable account.

With what you have laid out? VTI in a Roth IRA while I investigated other options at work. Many times, if you have TIAA-CREF, you also have access to a 457b.

[Zikoris]

I max out my registered accounts as soon as the space is available, and then chuck everything else into taxable accounts. I would do that regardless of the amount.

[yachi]

paid off my credit cards

Avoiding credit card debt has such a high return (15 to 20% or more!), that absolutely whatever it takes to do that would be first on my list.

I personally keep enough in a checking account that my credit cards are fully paid off every month.  Combined, they hit the account like a giant mortgage payment.  This month it was $1,600, last month it was $3,900 (vacation rental payment, and kayak purchase), the previous month it was $1,700.  I set it up as an autopay so we actually have to do more work to *not* pay it off.

[solon]

How, exactly, are you all "chucking" your money? I sometime transfer money between accounts, but I've never had occasion to chuck it.

Do you chuck it all?
Have you ever up-chucked?

[Weisass]

How, exactly, are you all "chucking" your money? I sometime transfer money between accounts, but I've never had occasion to chuck it.

Do you chuck it all?
Have you ever up-chucked?

Lol. This is my favorite response so far.

[ixtap]

How, exactly, are you all "chucking" your money? I sometime transfer money between accounts, but I've never had occasion to chuck it.

Do you chuck it all?
Have you ever up-chucked?

As a human, I have indeed up chucked.

I consider the transfer of excess funds to be very casual, which is a key part of the definition of chucking in American English.

But I have never established how much wood a woodchuck would chuck if a woodchuck could chuck wood. (Dang, that is even harder in writing)

[Psychstache]

How, exactly, are you all "chucking" your money? I sometime transfer money between accounts, but I've never had occasion to chuck it.

Do you chuck it all?
Have you ever up-chucked?

How many bucks could a mustache chuck if a mustache could chuck bucks?

[Sandi_k]

How many Lowe's could Rob Lowe rob if Rob Lowe could rob Lowe's?

[thrifted]

How, exactly, are you all "chucking" your money? I sometime transfer money between accounts, but I've never had occasion to chuck it.

Do you chuck it all?
Have you ever up-chucked?

LOL.

[Missy B]

How many Lowe's could Rob Lowe rob if Rob Lowe could rob Lowe's?

Is that yours? That wins the internets :)

[Sandi_k]

How many Lowe's could Rob Lowe rob if Rob Lowe could rob Lowe's?

Is that yours? That wins the internets :)

Hahahaha! Nope, not original to me, but thanks. ;)

[cool7hand]

Add it to our existing portfolio as soon as it's available.

[Abe]

Depending on your risk tolerance: US government I bonds, whatever your retirement accounts are invested in (via a regular brokerage) or invest in VTI

If you won’t need this for 9 years minimum, I’d go with VTI. It should recover in a few years and have some reasonable return by then!

[JAYSLOL]

How long will it take to pay off the mortgage without extra payments?  If it was me, if my mortgage will be paid off by the time I hit 50 with just the regular payments then I would put the extra $1300/m into a taxable brokerage account and invest it all according to my asset allocation (for me almost 100% stocks), but if the mortgage won’t be paid off for a few extra years after 50, I’d be tempted to pay it down more to meet that target.  Personally I like the idea of having a paid for house at retirement. 

[thrifted]

How, exactly, are you all "chucking" your money? I sometime transfer money between accounts, but I've never had occasion to chuck it.

Do you chuck it all?
Have you ever up-chucked?

How many bucks could a mustache chuck if a mustache could chuck bucks?

You mean "would". How many bucks would a mustache chuck if a mustache would chuck bucks? The answer is zero since we are a cheap miserly bunch and don't chuck our bucks for much except craft beer ;-).

Since I'm saving about the same amount out of my FIRE income due to not travelling during the pandemic and not owning a car, I've just chucked it into a Money Market savings account at my credit union awaiting The Great Upchucking that will happen soon once I start spending more again on travel. But if you aren't  going to use it soon you could buy I-bonds or pay down the mortgage (I know...I know...) if you plan to retire in a few years. Or taxable investments if you felt safe doing that now.

I actually did just that: open a money market. :)

[thrifted]

How long will it take to pay off the mortgage without extra payments?  If it was me, if my mortgage will be paid off by the time I hit 50 with just the regular payments then I would put the extra $1300/m into a taxable brokerage account and invest it all according to my asset allocation (for me almost 100% stocks), but if the mortgage won’t be paid off for a few extra years after 50, I’d be tempted to pay it down more to meet that target.  Personally I like the idea of having a paid for house at retirement.

I am 41 and I'm on a 30 year loan. I just bought the place in December 2021. I found this calculator and if I toss the $1300 into extra principal payments I'll pay off in about 13 years.

50 years of age was at one point my financial independence goal. I like the idea of having my house paid for by the time I reach retirement. Good food for thought.

I heard there's a tax break if you keep a balance on your home loan? My handyman from back in the day flipped homes and said something about that. I really can't recall what it was lol.

https://www.aarp.org/money/credit-loans-debt/mortgage_payoff_calculator/?cmp=KNC-DSO-COR-Money-22234-GOOG-MortgagePayoffCalculator-Exact-NonBrand&gclid=CjwKCAjwnZaVBhA6EiwAVVyv9KzmXu0JIksEywB3UID9ORiFoYHctqUyXoy1HjSpotk49V48Pt-V3BoCAr0QAvD_BwE&gclsrc=aw.ds

[thrifted]

Depending on your risk tolerance: US government I bonds, whatever your retirement accounts are invested in (via a regular brokerage) or invest in VTI

If you won’t need this for 9 years minimum, I’d go with VTI. It should recover in a few years and have some reasonable return by then!

Maybe I'll go half government I bonds and half VTI?

[Villanelle]

It sounds like you don't have an IRA.  So in your shoes, I'd open and max that (and one for my spouse if applicable) and then I'd put the rest in a taxable account according to my set asset allocation (which means it and the Roth $ would be in cheap index funds).  (Actually, if I hadn't done so I'd likely pick up some I bonds as well.

I would actively NOT put a penny toward extra mortgage payments.  Check out the "Don't Pay Off Your Mortgage" thread for more info. 

[ca-rn]

RothIRA and then taxable account allocated to your AA.

I wouldn't early pay mortgage unless you can pay it all at once and only if its a specific goal- like for ER.  Just paying extra principal doesn't do much. 

One option is to put it in a brokerage account to pay off your mortgage once it gets to some specified amount.  I have a house brokerage account, once it doubles the remaining mortgage balance and when I'm within 1 year of ER, then I'll pay it off.  It was nearly there but then 2022 happened and I'm not ready to ER yet so there's still time and the remaining mortgage keeps getting lower each month!

[Simpli-Fi]

don't forget to spend some

[poetdereves]

At this point I would probably keep mine in an easily accessible account to buy some more rental properties. We follow the investment order on MMM that others have pointed out and are at the point that everything is maxed out, so we'd just be adding more to our taxable account. I'm lucky to live in an area that I can have long term or short term rentals that give me a great return, so I'd like to get a couple more over the next year or two assuming that the housing market slows down just a tad.

[jsap819]

don't forget to spend some

This. Not everything should be about maximizing/optimizing your finances. You're on the right track already with a lot of your debts paid off so don't forget to spoil yourself from time to time and enjoy the fruits of your labor. Enjoy the journey along the way and don't focus too much on the destination.

[clarkfan1979]

What would you do if you had an additional $1300 a month to put away?

I am maxing my retirement contributions with TIAA CREF (my work puts in 8% of my pay without having to match), paid off my car, paid off my student loans, paid off my credit cards and have an emergency fund already. Currently, I'm keeping the money in a regular old credit union savings account. But I'm thinking about applying it towards the principal of my new home, or putting it into my TD Ameritrade account and investing in ETFs, or buying government bonds. I am 41 and plan to retire at age 50.

All recommendations and constructive criticism welcome! Aaaand... GO!

:)


My salary is 57K/year and my wife makes 15K/year as a 1099 contract worker. I contribute 13% and my employer contributes 14% into a 401a. After this, we have a surplus of $1500/month, mostly from rental income. A total of $1,000/month goes into a Roth account and the remaining $500/month goes into a brokerage account.