Hello,
Where I work, I have a few investment avenues I can pursue.
The first is the 401K. They'll match 50% up to a total match amount of 2.5%. So, I put in 5% to get the 2.5% match.
They also have a stock purchase program. Stock is PCP. Great stock to own, excellent growth oppurtunities. They let me buy it at a 15% discount from the lower of the price at Jan 1 of the grant year, or dec 31 of the grant year. Subject to a 10% max contribution. I'm contributing the max allowed 10%. The last two years I've done this, I've never seen less than a 30% year over year gain.
There's also a pension, but I'm sure that'll get axed before long.
Debts are as follows:
$5200 @ 3.24% on my motorcycle. I pay 140/mo on this
$193K @4.5% on my house, house value is 212K. my mortgage has no PMI, and re-fiing seems to cost more per month than the current loan!
$8.5K @7% on my student loans. I pay $130/month on this one.
I get $800 a month from renting out rooms. I have to replace the roof on my house this summer, and am looking to do a DIY addition bathroom to make my house a 3bed 2 bath house... greately increasing the value. I need about 12K for that... which I'm using saved Rent money, tax returns, and some of my stock. I figure the bathroom will add 15K of value to the house, and costs only 8K. (My labor factoring at $0, and 4K of the 12K total is for the roof.)
I project I'll have at least 8500 to 9K about 1 year from now (assuming the stock stays flat) from the stock purchase program. My plan was to cash it out, kill the motorcycle loan (if I have it still), then kill the student loans. Any left-over, invest in a Vangaurd fund.
The other option is, coupled with the increased value in my house from the added bathroom, use this 9K to bring my Loan to value ratio on the house to less than 80%, and re-finance then... if rates haven't crept up to 4.5% by then!
My question is... does this make sense? Should I reduce my contribution toward the stock purchase program and put more in the 401K? I don't like that idea because I can't retire early with that money. I also like the gauranteed 15% return on the stock purchase, which I can then invest in other funds. Any comments?
My goals are to be financially independant enough to retire in 13 years. By retire, I mean able to pursue my own ventures without the need of a day-job.