I have a new job that will afford me about $1,000/month above my expenses.
I am overwhelmed by all of the different options I have with this extra money, and I just can't decide what's best or what I should focus on - here are my options as I see them:
- save a 6-8 month emergency fund (still now sure if I should do this, discussed in another thread)
- aggresively pay down my mortgage (4.5%)
- maximize IRA contributions (and then switch to 401k when it becomes available in 5 months)
- put money towards micro-lending/p2p lending (experimented very little with this last year, getting a 13% return so far), possibly even open a new IRA at one of the two micro-lending options?
- Buy index funds/dividend funds/stocks (facebook IPO, ride it to the peak :)?) in a traditional brokerage account
- Save money for a down payment on a rental property
- ? - am I missing anything?
I guess I am leaning towards first splitting the money between my IRA (tax deduction plays a role here) and building that emergency fund.
Once I have what feels like a good number in the emergency fund, I might allocate a small bit to micro-lending, and use the rest to pay down the mortgage until it's at least 20% paid.
After the mortgage is in a safe place, I could then crank as much into the 401k as possible - the only thing that worries me is the possibility of the 72t/5 years IRA loopholes somehow being "fixed" so that my money won't be accessible in 10-15 years when I have enough to soft-retire.
I have considered only contributing up to the employer match on the 401k (once it's available), and then doing other things with the excess.
Also, I am tempted to get into the rental game, but I feel that I am quite a few years from actually being able to jump into it - maybe this is what I would save the excess for after I've gotten my employer match on the 401k?
Any sage advice is very heartily appreciated!