New Investor Advice / Nudge in Right Direction

[KayoticSully]

I'm starting to get to the point in my MMM journey where I am thinking about investments.  Generally I am looking for advice on how to start off, ease myself (and wife) into investing in a way that will build confidence.

I apologize for my verbosity.  I just wanted to give everyone a pretty clear picture.

Quick Background
I'm 26 and just got married this year.  My wife has some student loans (~20K spread across 6 loans). I put 10% of my paycheck into my 401k (~8600/yr) which is currently around 33k.  My parents had invested gift money throughout my life for me (definitely something I am grateful for now) which is currently invested in Apple, Amazon, and some Mutual Funds (I think) totaling around 71K (spread across one normal investment account and one Roth investment account).

My Situation
My wife is fairly frugal but also very cautious and fearful of the stock market.  I have been able to make some progress with her as I think she's onboard with investing some money sometime in the near future.  On my side of things, I am a little fearful although I do understand the math as to why I shouldn't be... I like to see things in action before I am 100% comfortable.

As best as I can (as I know nothing can be guaranteed) I would like to make our first few investments such that they build our confidence in investing.  Ideally I would like to invest about $1500-$2000 a month, but thats going to be a hard number to convince my wife of. Over time I think she will see what I am starting to see (she is an extremely smart woman) but that is a large amount of money to look at as a risk every month.  Even I am wary of that number.

Does anyone have any advice along those lines? 
Any first steps we should take?
Or other advice for a young couple just getting into the world of investing?

Thanks in advance, I hope this post wasn't too long!

[MustacheAndaHalf]

You might read "A Random Walk Down Wall Street", or if you don't want to read much, "The Investment Answer".  Both rely on academic studies of stock markets over decades.  Neither book recommends picking individual stocks, but rather to aim for low expense ratios and index funds.  But knowing isn't the whole battle.  Reading and learning can help you avoid investing based on panic.

Knowing the interest rates of those student loans would help with giving you advice.  For example, a loan at 6% is high enough it might be better than investing... while a loan at 3% might be reasonable to pay over time.  It's also okay to feel like getting free of student loan debt is more important than investing.  Almost all private student loans cannot be discharged in bankruptcy, so they never go away until paid off.

[frugledoc]

Don't start investing yet.  You don't know enough and your risk tolerance is very low.  Check out bogleheads and jcollinsh stock series.   You're off to a good start by even thinking about this stuff!

[wienerdog]

I agree with Fugledoc.  Along with what they suggested here is a free 114 page pdf that will also get you going.  You can follow up with his other pdfs after you read that one.

http://paulmerriman.com/first-time-investors/

http://paulmerriman.com/how-to-invest-series-complimentary-download/

[KayoticSully]

You might read "A Random Walk Down Wall Street", or if you don't want to read much, "The Investment Answer".  Both rely on academic studies of stock markets over decades.  Neither book recommends picking individual stocks, but rather to aim for low expense ratios and index funds.  But knowing isn't the whole battle.  Reading and learning can help you avoid investing based on panic.

Knowing the interest rates of those student loans would help with giving you advice.  For example, a loan at 6% is high enough it might be better than investing... while a loan at 3% might be reasonable to pay over time.  It's also okay to feel like getting free of student loan debt is more important than investing.  Almost all private student loans cannot be discharged in bankruptcy, so they never go away until paid off.

I love reading, so I'll definitely pick those up.  As far as the interest on the student loans, each of the 6 are different. I think some are around 3% and are not too bad, but others are much higher.  Our issue with them though is the loan "management company" for lack of knowing a better term, wont let us pay extra principle and won't let us pay down a specific loan more quickly if we pay more than the minimum.  What seems to happen is we pay more than the minimum and they take the extra money and first pay extra interest, then randomly (or according to some algorithm they probably have) pay a very small amount towards principle of one of the loans.

People keep telling us that we should be able to direct them which loan's principle we want to pay down with the extra money we pay in a month, but there seems to be no option to do so, and when we call them, they tell us its not possible.  Does not seem right to me, but hey, I know nothing about how the laws around student loans work.

In short, we would love to pay down the high interest loans quickly and have tried to, but seems like theres no way for us to do that exactly...

[KayoticSully]

Don't start investing yet.  You don't know enough and your risk tolerance is very low.  Check out bogleheads and jcollinsh stock series.   You're off to a good start by even thinking about this stuff!

I agree with Fugledoc.  Along with what they suggested here is a free 114 page pdf that will also get you going.  You can follow up with his other pdfs after you read that one.

http://paulmerriman.com/first-time-investors/

http://paulmerriman.com/how-to-invest-series-complimentary-download/

Thanks for the resources.  I probably do need to spend more time reading and building up our savings before we start investing.  I just get antsy knowing that the earlier you invest, the better chances you have for greater returns.  But being smart about it is more important.  We are very young and have plenty of time to invest in a few years.

[Another Reader]

First, look into refinancing some or all of the student loans if they are eligible.  Several threads here discuss the various options.  You have a garbage servicer that needs to be replaced and you may get a significantly lower average interest rate than what you currently have.

Second, I disagree with waiting on the investing.  The sooner you start the better, and that's especially true with the retirement accounts.  Some here will rail against the idea, but I like Betterment for those starting out with just a little money.  It's very transparent and visual, so you can log in to see what's going on.  You will get a lot of positive reinforcement from the e-mails about reinvesting dividends and the like.  This can be very helpful to someone that is scared, like your wife.  It also starts the habit of investing.  Automatically putting money in every month creates the habit and the need to account for the money in your budget.

Once you are more familiar with investing and the amount is more substantial, you can think about moving the money to Vanguard or Fidelity.  I would NOT touch the $71k until I was much more knowledgeable about investing.