Author Topic: Priorities?  (Read 2077 times)

Stubble Stash

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Priorities?
« on: January 30, 2017, 12:23:11 PM »
I am relatively new and looking for some guidance on investment priorities from more seasoned  mustachians.

I currently have approx. $3,500 left after all monthly expenses.  What is the top priority for that money?

Debts:
Mortgage - $215,000 (2.65% interest rate)
School loan - $28,00 (0.875% interest rate)
No car or credit card balances

Employer offers 15% discount for ESPP up to $1,250 per month.

Where is the best place to start?  More in 401k, ESPP, debt, other investments?

Thanks for your opinions!

prognastat

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Re: Priorities?
« Reply #1 on: January 30, 2017, 12:32:34 PM »
http://forum.mrmoneymustache.com/investor-alley/investment-order-65299/

This is generally the advice most will give you. So likely your 401k will come before paying off loans and ESPP.

terran

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Re: Priorities?
« Reply #2 on: January 30, 2017, 12:35:15 PM »
This should help: http://forum.mrmoneymustache.com/investor-alley/investment-order-65299/msg1333153/#msg1333153 (prognastat beat me to it)

The only unique factor you have is the ESPP, which I think would depend on how the plan is set up, but others more familiar with them can weigh in there. From what I've seen, the primary factors are how the discount works (what price it's based on compared to when you can sign up/buy/sell) and if there are any required holding periods. If it's a good plan then it's basically free money, so once you fund it the first time then you can just keep churning it for a 15% bonus minus any investment losses (or plus any gains) during the holding period that you can then direct to other investments per the order above. Most people seem to recommend selling as soon as you're allowed since investing in individual stocks in not usually recommended anyway, and you already have enough risk of your employer doing poorly in the markets since it could cause layoffs. Don't want any extra risk of losing your job and having your investments tank at the same time than you have to.