Author Topic: Investment order advice  (Read 860 times)

StinkyCoach

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Investment order advice
« on: September 10, 2018, 10:07:30 AM »
I've read through the investment order found here -  https://forum.mrmoneymustache.com/investor-alley/investment-order/

If this is the wrong forum I apologize. Mods please let me know where to move it.

I am a public high school teacher and I have some questions about the suggested order.

0- Emergency fund is fine.

1 - I have about $16500 in my 403b. I just moved it from AXA to Security Benefit's Direct Invest. The Direct Invest is a much better option as the fees are Vanguard's fund expense ratio and an additional $30 a year. My employer contributes a small, $300 per year if I miss 3 days or less and am contributing that much myself. It goes into a separate matching account through a third party administrator which is combined with my 403b later when I leave district or retire. That's not much money, and it sounds like it's not going to be growing at all if I continue with the district until retirement.

2 - I have $5000 in debt that's been transferred to the Chase Slate card. I'm using any extra money at this point to pay that off before the zero % interest period is over. Since it's currently zero% should I just pay the minimum amount divided by the number of months left before the interest kicks back in and use the rest to invest? Or should I continue paying it down early?

3 - Our district offered an HSA for the first time this year. I'm maxing it out.

4 - I opened a Roth IRA through Fidelity but haven't put much in.

5 - 403b - This, like part 1 is the main sticking point. Not sure if I should contribute more than $300 in step 1 then max Roth IRA before coming to this.

The rest of the steps are pretty self explanatory. I have a mortgage but no other debt. Truck is paid off and I have a new bike to start my commutes to school.

Any help or advice would be appreciated.

Catbert

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Re: Investment order advice
« Reply #1 on: September 10, 2018, 11:37:28 AM »
With regard to the Slate card, I would take the existing balance and divide by the number of months left at 0%. Set it up to pay that automatically every month.  Actually I'd aim to pay it back a month early, just in case.  No real reason to pay back sooner.

MDM

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Re: Investment order advice
« Reply #2 on: September 10, 2018, 11:46:48 AM »
In general,
1) Get the employer match.  Practically nothing beats that.
2) Decide whether you prefer traditional or Roth.  See links in the Investment Order post about this.
3) Pick the account (403b or IRA) that gives you your preference (from #2) at the lowest fee and desired investment options.
etc.

Does that help?

StinkyCoach

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Re: Investment order advice
« Reply #3 on: September 10, 2018, 11:50:46 AM »
In general,
1) Get the employer match.  Practically nothing beats that.
2) Decide whether you prefer traditional or Roth.  See links in the Investment Order post about this.
3) Pick the account (403b or IRA) that gives you your preference (from #2) at the lowest fee and desired investment options.
etc.

Does that help?

Yes it does, thanks. Is the employer match still a good option even if that money sits in an interest free account? I don't know that it does, but I will check.

StinkyCoach

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Re: Investment order advice
« Reply #4 on: September 10, 2018, 11:53:36 AM »
With regard to the Slate card, I would take the existing balance and divide by the number of months left at 0%. Set it up to pay that automatically every month.  Actually I'd aim to pay it back a month early, just in case.  No real reason to pay back sooner.

Cool, thanks.

MDM

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Re: Investment order advice
« Reply #5 on: September 10, 2018, 02:14:38 PM »
Yes it does, thanks. Is the employer match still a good option even if that money sits in an interest free account? I don't know that it does, but I will check.
That would be a terrible thing for the employer to do, but even so it would be a good idea if you won't be there for more than ~10 years.  The ~10 years comes from the approximate time it would take for your money to double if it earned 7%/yr.

StinkyCoach

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Re: Investment order advice
« Reply #6 on: September 11, 2018, 07:12:31 AM »
Yes it does, thanks. Is the employer match still a good option even if that money sits in an interest free account? I don't know that it does, but I will check.
That would be a terrible thing for the employer to do, but even so it would be a good idea if you won't be there for more than ~10 years.  The ~10 years comes from the approximate time it would take for your money to double if it earned 7%/yr.

Awesome thanks.