Author Topic: Mortgage Payment - What to do with it?  (Read 2012 times)

SomeDaySoon

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Mortgage Payment - What to do with it?
« on: April 27, 2014, 05:29:37 PM »
Hi:

I was hoping for some advice on where to "park" my mortgage payment.  My husband and I have become debt-free this past month by making our final payment on our mortgage (woot!)

My goal is to become financially independent and I'm reading as much as I can to figure out what are the best investment options for me to get there  (I have money in bonds, stocks, rollover IRA and 401k, etc. and just need time to figure it all out) In the meantime, I want to continue to make my mortgage payment to an account since I'm already use to making out the $600 check each month (this was 1/2 of our mortgage which my husband and I split.)

As we all know, savings and CDs pay absolutely nothing.  What I'm looking for right now until I figure out what to do with it is: low risk, pays better than a savings, CD and easily accessible when I finally figure it all out.   

Thanks for taking the time to read this, and looking forward to any insight you might have.
« Last Edit: April 27, 2014, 05:47:07 PM by SomeDaySoon »

shuffler

  • Bristles
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Re: Mortgage Payment - What to do with it?
« Reply #1 on: April 27, 2014, 05:44:15 PM »
My goal is to become financially dependent  ...
Then I don't think this is the right forum for you.  ;^)

I'm reading as much as I can to figure out what are the best investment options for me to get there  (I have money in bonds, stocks, rollover IRA and 401k, etc. and just need time to figure it all out)
Lots of folks recommend:  http://jlcollinsnh.com/stock-series/

What I'm looking for right now until I figure out what to do with it is: low risk, pays better than a savings, CD and easily accessible when I finally figure it all out.   
Depends on your definition of "low risk", I suppose.  If you want something with as little risk as CDs and savings accounts, then you're not going to find a magic investment that pays more than those do (and while remaining liquid).
Index funds are easy, and probably pay more on average than CDs/savings, but they do have more risk.

You might check out Betterment.com.  I've not used them myself (so this is not a recommendation), but they do seem to want to make things simple for people who have not yet figured it all out for themselves.  They are a for-profit company, so keep in mind that they do charge for the convenience they provide.

How long will it take you to figure out what you want to do longer term?  If it takes you a month to figure it out, then it's probably not worth making any intermediate moves.  Even if it takes you a year, probably not worth it (IMO).

SomeDaySoon

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Re: Mortgage Payment - What to do with it?
« Reply #2 on: April 27, 2014, 06:14:38 PM »
Thanks for the reply!  Definitely, definitely meant Independent and fixed it.  :-)

I should note when I mention figure it all out is I mean,  "where do I have to reallocate my current investments to get a decent income stream coming in."  I have a good understanding of stocks, bonds, index funds, etc.  My goal as MMM says is "have my employees working for me" and at this point, I don't think they are being very efficient (slackers!)

I'm definitely planning on moving on to reading the blog as soon as I finish MMM (I'm reading every article and comments from the beginning and started 3 months ago - wow, there is a lot of great stuff in there) as well as the recommended investment books.

I don't think I'm willing to pay anyone at this point. 

I know a lot of people here love index funds (and I'm already invested in one) but at this point, my goal is to figure out how to max out my employees.  My big issue is that the 1st of the month is coming up and I don't just want to invest more of my money without being 100% certain it's the best place for them, and I don't want to take a month off having a $600 "bill" I need to pay. 

Thanks again!







shuffler

  • Bristles
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Re: Mortgage Payment - What to do with it?
« Reply #3 on: April 27, 2014, 07:33:22 PM »
Before picking things to invest in, it might help to write up an Investment Policy Statement.  It should help you get all your info in one place, see the big picture, define some goals, and set some strategies to get there.

Quote
An Investment policy statement (IPS) is a statement that defines general investment goals and objectives. It describes the strategies that will be used to meet these objectives and contains specific information on subjects such as asset allocation, risk tolerance, and liquidity requirements.
http://www.bogleheads.org/wiki/IPS