Here is my situation:
I bought a house with my life partner and we each pay 50% of the mortgage and we each own 50% of this house.
I sold my previous residential home after renting it out for two years. I did the math and it made sense for me to sell it because rent/value of house was low and the opportunity to sell it without real estate agents fees, repairs, investment capital gains, etc presented itself.
I had no mortgage on my previous residential home so I now have a healthy sum of money to invest.
I have been researching, educating myself, talking with experienced real estate investors for the past year because I am considering investing part of the money in one, two, or possibly three duplexes if properties become available that I would feel comfortable working with (I am not a plumber, electrician, carpenter, etc and I need to feel safe going to my rental property).
My tentative plan is:
Starting this month to invest $400/week/fund into five different Vanguard Index Funds:
Large Cap: Institutional Index Fund
Mid Cap: Mid-Cap Index Fund
Small Cap: Small-Cap Index Fund
International Stock: Total International Stock Index Fund
Bond: Total Bond Market Index Fund
Annually, I also plan to invest $5500 into a Roth IRA.
If I follow this formula, I will have my sum of money fully invested in three years.
(I started this calendar year maxing out my 401K plan contributions from my paycheck, as well.)
I understand the concept of dollar cost averaging which explains my strategy for spreading out my contributions over a few years.
I am nervous though about having all of my savings in the stock market which is why I keep studying about real estate investments.
At the same time, in my region of the U.S., over the past year, I have not found any investment properties that are within the parameters that investors recommend (monthly rent about 1% of sales price). Typical scenario examples are:
Monthly Rent $1500, Asking Price $190,000 with owner paying some or all utilities.
Finally, my partner and I are trying to keep an equal amount of money invested in our current house. He does not have extra money to put into our current house so it isn't really an option to "pay off" my half of the house early. Therefore, I am looking for ways to invest my money that will earn more than the 4.75% mortgage rate on my current residence.
I work full time and plan to work 7-8 more years before I retire. I do like my job so I am not counting down days or anything like that. However, I am 48 years old and I see people around me with health issues developing, so I realize that I may decide that I want to retire earlier and work longer.
I do have a retirement plan and money invested in Large Cap Mutual Funds (mostly) at this point in my life.
My Main Questions are:
1. Is it wise if I end up investing almost all of my money in Mutual Funds?
2. Is spreading out the dollar cost averaging concept over three years long enough for a larger sum of money?
3. Is there another form of investing that I should seriously consider?
Thanks for your input,
Ms. Frugal