Would appreciate some ideas here!

[LenaB]

I would appreciate some insight/ideas on what we should do.

Back-story.  We’re in our early twenties, married, two children under two. Live in a place that we are 95% confident we will stay in as we love it, have a great community and both our families live here.  We have no debt at all.  Our yearly expenses are about $35,000 (rounding up).  We currently save $54,000 - $70,000 a year.  We already have way more than 6 months of living expenses available plus around $40,000 sitting in a savings account, which is growing. 

Here’s the problem:

1. We would like to invest but know nothing about it.
2. We’re very interested in rental houses as an investment but are unsure at what time to get that started.
3. We would like to own our house as well but are also unsure when we should take the step to buy.  Should we get a mortgage? Wait until we can pay outright?  We currently rent a small 2-bedroom house for under $950 a month and have great landlords who are happy for us to stay as long as we want to.

Any thoughts would be appreciated!

Thanks!
Lena

[Tim1965]

As for No. 1, you could follow MMM's advice here and go with a Total Stock Market Index Fund. http://www.mrmoneymustache.com/2011/05/18/how-to-make-money-in-the-stock-market/

It's the easiest approach and at your age you probably don't need to fret about smoothing out the ride with bonds.

You can buy a rental house whenever you want, really, but keep in mind it's work. Some people on this site would differ from me on this, but yes, you can have pain in the ass tenants and you do need to be a little handy.

I wouldn't wait until you have all cash for a house. Nothing wrong with a mortgage, as long as you pay it off aggressively, presuming it helps you get the house you want. After all, you're already handing over $12K a year to your landlord.

Or you could combine approaches: buy a two-family house, live in one half, rent out the other half.

[MDM]

1. We would like to invest but know nothing about it.

The three links below approach this question from different perspectives, but all are good.  You could look at all of them and follow the one that makes the most sense to you.

http://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_start-up_kit
http://www.moneychimp.com/
http://jlcollinsnh.com/stock-series/