Author Topic: What should be a priority?  (Read 2904 times)

moneysaver

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What should be a priority?
« on: August 08, 2015, 02:06:41 PM »
I am a 33 year old professional with a husband and two small children. I will pay my car off in the next few months but am not sure where I should be investing my money once that loan is paid off.  Here is my current situation :
First I know this heavily frowned upon but my husband and I have completely separate money. What I mean is his money is his and mine is mine.  We equally split all housing and child rearing costs 50/50. I am a huge saver while he thoroughly enjoys spending it.
We currently owe $160,000 on our mortgage at 3.25%
I have $88,000 in various retirement accounts (401K, 403 B and a pension through the school district where I teach)
$16,000 in an emergency account
Kids college accounts are set up and am contributing to them a few times a year
As well as a few other small counts with less than $1,000 in peer to peer lending, checking accounts, and in stocks that I personally play with.

Originally I wanted to put all my extra money on my mortgage to get it paid off, however my husband does not make any extra payments and our interest rate is low.
I thought about adding more to the peer-to-peer lending since the stock market might be taking a slight dip in the future.
Another idea is to put money into mutual funds and save up to purchase a rental house or two when the price is right (this is something I would like to get into before I enter I retire at the age of 54).
Any advice is greatly appreciated, or if I am completely missing something please point it out. 

In addition: I am looking to get around $100,000 in inheritance and would like to have a plan on what to do with that money before it comes.
Thanks guys!

Rezdent

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Re: What should be a priority?
« Reply #1 on: August 08, 2015, 03:49:44 PM »
Hmm.
So exactly how "separate" is your finances?
There's the "we split our bills equally" separate, but we are married and the house belongs to both of us...
Or, "we split bills separately" and we each currently have 50% 9f a house.

I am asking, because if you guys are truly separate as in scenario B, then it makes no sense to pay the mortgage.

moneysaver

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Re: What should be a priority?
« Reply #2 on: August 08, 2015, 04:55:45 PM »
Separate as like we each own 50% of the house. In the beginning of our 11 year marriage we combined accounts while we were in college so we were poor anyway.  However when we starting our professions and were living paycheck to paycheck things had to change.  I had never lived paycheck to paycheck until we combined our accounts and it was not working.
So since you said don't put the extra money towards the mortgage where should I put it?

JLee

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Re: What should be a priority?
« Reply #3 on: August 08, 2015, 05:01:06 PM »
If you aren't already max'ing tax advantaged accounts (401k/IRA/etc), I would do that first.

fb132

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Re: What should be a priority?
« Reply #4 on: August 08, 2015, 05:16:49 PM »
Also, why are you investing in mutual funds...those are usually loaded with high fees, you should be investing in a vanguard total stock market index fund.

slugline

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Re: What should be a priority?
« Reply #5 on: August 08, 2015, 05:35:07 PM »
Also, why are you investing in mutual funds...those are usually loaded with high fees, you should be investing in a vanguard total stock market index fund.

Vanguard Total Stock Market Index Fund is a mutual fund.

"Index funds" are just one type of mutual funds. At least find out which funds the OP is invested in before judging!
« Last Edit: August 08, 2015, 05:41:46 PM by slugline »

forummm

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Re: What should be a priority?
« Reply #6 on: August 08, 2015, 06:38:25 PM »
I wouldn't pay off a 3.25% mortgage early. I would invest the money instead.

fb132

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Re: What should be a priority?
« Reply #7 on: August 08, 2015, 07:00:16 PM »
Also, why are you investing in mutual funds...those are usually loaded with high fees, you should be investing in a vanguard total stock market index fund.

Vanguard Total Stock Market Index Fund is a mutual fund.

"Index funds" are just one type of mutual funds. At least find out which funds the OP is invested in before judging!
Calm down buddy, I was just asking what she is doing with a mutual fund. I would of prefered for her to answer "I am invested with Vanguard" instead of a shitty reply like you just made. I wasn't judging her, I was just asking a question.
« Last Edit: August 08, 2015, 07:04:49 PM by fb132 »

Retired To Win

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Re: What should be a priority?
« Reply #8 on: August 08, 2015, 07:09:32 PM »
I wouldn't pay off a 3.25% mortgage early. I would invest the money instead.

Agreed.  In the OP's shoes, after I had maxed out my allowed contributions into tax-deferred accounts, I would direct any surplus money into taxable (or Roth??) investment accounts.  That would include some peer lending.  (Turns out, this advice is precisely what I did.)

And, FWIW, my wife of 20 years and I have ALWAYS maintained separate finances, with each of us paying 50% of our joint expenses.  We've even gone into a couple of real estate "uneven" partnership deals; we just cashed out of one where my stake and share was 25% and hers was 75%.
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moneysaver

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Re: What should be a priority?
« Reply #9 on: August 08, 2015, 10:36:37 PM »
Thank you all for the advice!  I do max out my 401 K each year.  I currently have a financial adviser ( I know face punch) so I have not checked out Vanguard yet. I have talked to others about it though, and it seems like the thought was: Vanguard is passive investing whereas my financial planner actively tries to beat the market.  Now I am confused about what do to here. 

I am excited to hear that there are others that have been married for a long time with separate finances:)

Sounds like once all retirement accounts have been maxed I will invest more in peer-to-peer lending and look into Vanguard.  Thanks!

coffeehound

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Re: What should be a priority?
« Reply #10 on: August 08, 2015, 10:50:14 PM »
Thank you all for the advice!  I do max out my 401 K each year.  I currently have a financial adviser ( I know face punch) so I have not checked out Vanguard yet. I have talked to others about it though, and it seems like the thought was: Vanguard is passive investing whereas my financial planner actively tries to beat the market.  Now I am confused about what do to here. 

I am excited to hear that there are others that have been married for a long time with separate finances:)

Sounds like once all retirement accounts have been maxed I will invest more in peer-to-peer lending and look into Vanguard.  Thanks!

Advisors are in the business to make money for themselves - you are their second priority.  And, over time, your returns from a buy and hold strategy with a diversified exchange traded portfolio, at the least, match your returns from an actively-managed fund, and you'll save yourself buckets of cash on fees to the planner.

fb132

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Re: What should be a priority?
« Reply #11 on: August 09, 2015, 06:56:57 AM »
Thank you all for the advice!  I do max out my 401 K each year.  I currently have a financial adviser ( I know face punch) so I have not checked out Vanguard yet. I have talked to others about it though, and it seems like the thought was: Vanguard is passive investing whereas my financial planner actively tries to beat the market.  Now I am confused about what do to here. 

I am excited to hear that there are others that have been married for a long time with separate finances:)

Sounds like once all retirement accounts have been maxed I will invest more in peer-to-peer lending and look into Vanguard.  Thanks!
There is a stat saying that Vanguard S&P 500 has out performed 90% of all domestic equity funds over the past 5 years and the S&P isn't the only index fund out there, but it just goes to show that trying to beat the market is a loser's game for the everyday people like us simply because financial advisors put all kinds of fees. Only very few are famous for beating the market on a regular basis and those are what we call the superstars of investors (ex.: Warren Buffet). Even Buffet himself said that when he dies, his investments will all be transfered to an index fund for his family, because he also knows that playing the market is not for everyone.

moneysaver

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Re: What should be a priority?
« Reply #12 on: August 09, 2015, 09:42:02 AM »

[/quote]
There is a stat saying that Vanguard S&P 500 has out performed 90% of all domestic equity funds over the past 5 years and the S&P isn't the only index fund out there, but it just goes to show that trying to beat the market is a loser's game for the everyday people like us simply because financial advisors put all kinds of fees. Only very few are famous for beating the market on a regular basis and those are what we call the superstars of investors (ex.: Warren Buffet). Even Buffet himself said that when he dies, his investments will all be transfered to an index fund for his family, because he also knows that playing the market is not for everyone.
[/quote]

That is very interesting and it does make sense that if your fees are lower that you stand to keep more of your money, even if they are in passive accounts.:)

fb132

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Re: What should be a priority?
« Reply #13 on: August 09, 2015, 10:15:35 AM »

There is a stat saying that Vanguard S&P 500 has out performed 90% of all domestic equity funds over the past 5 years and the S&P isn't the only index fund out there, but it just goes to show that trying to beat the market is a loser's game for the everyday people like us simply because financial advisors put all kinds of fees. Only very few are famous for beating the market on a regular basis and those are what we call the superstars of investors (ex.: Warren Buffet). Even Buffet himself said that when he dies, his investments will all be transfered to an index fund for his family, because he also knows that playing the market is not for everyone.
[/quote]

That is very interesting and it does make sense that if your fees are lower that you stand to keep more of your money, even if they are in passive accounts.:)
[/quote]
When your playing the market, it is like you are playing poker with other poker players, so the chances of you winning the game is slim. Not impossible, but slim...just like winning the lottery is possible, but the chances are slim.