Hi All,
I'm new to the forum but have spent the last 2 weeks reading almost all of the blog posts here, and this morning discovered the forum. I'm a 28 yr old engineer who went to college a bit late, but finished 2 years ago with an industrial technology degree and now work as a design engineer and make about $50k/yr before tax/deductions. My wife is a business intelligence consultant and makes roughly $100k before taxes/deductions.
We have no kids, no credit card debt, no car payments (My 2006 Scion XB w/ 110k miles and her 2011 Kia Sorento w/ 30k miles are both paid off). She recently started a new job which is about 5 miles away from our home compared to the 25 mile traffic commute she had before. I'm 9 miles away.
Without giving you more info than you're probably looking for, we have about $20k sitting in a "high yield savings account". High yield meaning 0.75% intrest..lol. So I'd like to know what the best place to invest would be. I have a 401k that I put 10% of my check into, and my wife does the same. Both companies match up to 6%. Should I open a Roth IRA with our savings? I hear a lot about people on the forum putting money into index funds, but I dont know a lot about those. After reading the posts on this website I feel like should have that $25k starting to "snowball" by investing most of it somewhere. Do my wife and I each open a Roth IRA? Do we increase our 401k contributions? One financial blog I read online was giving someone the advice of putting into the 401k only up to the max your company will match, then max out a Roth IRA ($5000/yr), then if there's money left over increase your 401k some more. Thoughts?
Also in large part due to this site we've cut our expenses dramatically. We used to go out to dinner many times every week and are now grocery shopping instead. We're limiting going out to an inexpensive dinner 1x per week for now. Also I dont come home for lunch anymore (a stupid way I was DOUBLING my commute) and no more fast food ever. My "hobby budget" no longer exists, which was $125/month to do whatever I wanted with.. instead that goes to savings.
It sounds wrong to say this, but one of my big motivators is to see my coworkers and friends spending (wasting) their money on lavish items ($40,000 cars/trucks, super expensive exotic vacations, huge luxury home renovations) and knowing that instead of doing those things I have bank account that is growing by the minute.