How to Invest

[torbisen]

Hi.
I am new here and really like your site. My family like to try to go for it!!! We live in Norway and the expenses are a bit different so the need for a slightly bigger amount will apply.

ANYWAY

We are in the financial situation with one house, and one rental apartment. The rental pays better than 4% so will keep it for now.
The house is mortgagefree and the rental is mortaged by approxemately 100000$ less than it would sell for.
So the BIG question is.
What do we do with the money.
They are going into Index fund, but how fast.
We have motgage of approx 150000$, should we pay down any of that or put everything into indexfund for now?

IF we maximize the index fund input which will be around 200000$. How many months / years would you take to put them in?
I mean if you put in monthly you would risk less in case of a big Wall Street meltdown, or would you put it all in now?

[matchewed]

If I may be so bold I'm going to break up what you are asking into different chunks and rephrase it.

1)What do I do with my rental income (the >4% you mentioned)?

2)Should I pay down my mortgage?

3)Should I lump sum invest or dollar cost average it over time?

I'll answer in that order, and please let me know if I misunderstood anything.

1) The rental income could go into whatever you want, towards living expenses, towards investments, anything. It's extra income. It all depends on your long term goals.

2)This depends on your risk tolerance, the interest rate on the mortgage, the potential returns on investments, and your long term goals. There is no clear cut answer. The best rule of thumb is that if you can get more from a potential return on investment do that rather than pay down the mortgage.

3) Lump sum investment will often perform better, DCA is advantageous in the scenario spoken of in #1 when you excess cash monthly to invest you are practicing DCA. I would personally put it all in now but it depends on your long term goals (common theme I know).