Where to invest extra?

[Jules13]

If we are maxing out 401k and Roth IRAs, where do you think we should put any extra that we are saving?  We have a $30k emergency fund and about 12 years left ($118k) left on our mortgage with a 2.75% rate.  With the mortgage rate being so low, I wasn't going to bother paying it down early, but it would also be nice to have it paid off by the time our oldest graduates high school, which would be in 8 years.  If we paid an extra $300/month, we could pay it off it 8 years.  Or, where else would you recommend putting it?  What would you do?  Thanks!

[Jeremy E.]

You could put it in a taxable Vanguard account. Side note, if you haven't researched whether or not a traditional IRA would be better than a Roth IRA, I recommend you research it. Here is a good place to start.
http://www.madfientist.com/traditional-ira-vs-roth-ira/

[Goldy]

do you have an HSA?

[PARedbeard]

With your mortgage rate so low, I would also encourage you to start investing in some kind of low-cost index fund as a taxable investment.

[AnEDO]

"do you have an HSA?"

This.  Max that out if you can.  This is second priority for us after maxing out the 401k.  Then we contribute to a taxable vanguard total stock market ETF.

[Jules13]

Thanks for the input so far.

No HSA, so that's out.

I have a traditional IRA that is a leftover from a 401k transfer from when I left work (I am a SAHM).  I've wondered about putting money in there vs the Roth, but was also wondering about converting it to a Roth.  Thanks for the link...will investigate.

I have no clue what is meant by "some kind of low-cost index fund as a taxable investment", so will definitely research that also.  Do you mean like a Vanguard or Fidelity mutual fund type investment?  Or the "taxable vanguard total stock market ETF" that 'AnEDO' mentioned?

Also...with all the mentions of Vanguard...why so popular?  We have all of our IRAs at Fidelity, so just wondering?  Doesn't seem like there is much of a different between the two, but maybe I'm mistaken. 

Thanks!

[Jeremy E.]

Thanks for the input so far.

No HSA, so that's out.

I have a traditional IRA that is a leftover from a 401k transfer from when I left work (I am a SAHM).  I've wondered about putting money in there vs the Roth, but was also wondering about converting it to a Roth.  Thanks for the link...will investigate.

I have no clue what is meant by "some kind of low-cost index fund as a taxable investment", so will definitely research that also.  Do you mean like a Vanguard or Fidelity mutual fund type investment?  Or the "taxable vanguard total stock market ETF" that 'AnEDO' mentioned?

Also...with all the mentions of Vanguard...why so popular?  We have all of our IRAs at Fidelity, so just wondering?  Doesn't seem like there is much of a different between the two, but maybe I'm mistaken. 

Thanks!

I believe he just means the vanguard total stock market index fund. Vanguard is so popular because the brilliant Jack Bogle invented index investing, created Vanguard, and Vanguard is owned by those who invest in it so there is no greedy executives pocketing money from you. You get the lowest possible expense ratios. Here are some more reasons
http://jlcollinsnh.com/2012/09/07/stocks-part-x-what-if-vanguard-gets-nuked/

[Eric]

Also...with all the mentions of Vanguard...why so popular?  We have all of our IRAs at Fidelity, so just wondering?  Doesn't seem like there is much of a different between the two, but maybe I'm mistaken. 

There isn't much difference.  Fidelity is pretty good.  Vanguard is mentioned often because they generally have the lowest fees (expense ratios).  Fidelity is competitive though.  Most other brokerages are not.

[seattlecyclone]

Also...with all the mentions of Vanguard...why so popular?  We have all of our IRAs at Fidelity, so just wondering?  Doesn't seem like there is much of a different between the two, but maybe I'm mistaken.

Vanguard is the leader in low-cost index funds. We tend to like that type of investment around here, so we tend to recommend the leader in the category for people who are just starting out and want to open an account.

Fidelity has traditionally been more of a higher-fee active fund company. However in response to the rise of Vanguard and index investing, they now have a pretty good selection of index funds under the Spartan brand. I view these funds as basically equivalent to Vanguard funds. If you're happy enough with Fidelity, go ahead and open a taxable account there and pick a Spartan fund or two to invest in.

[PARedbeard]

Yup! I meant just go with VTI, Vanguard's total stock index ETF. With most brokerages you can buy it commission-free. I am not opposed to Fidelity's funds (iShares look pretty good), but I do like that VTI's expense ratio is .0.05% vs. IVW's 0.18% or IVE's 0.18%

[Jeremy E.]

Biggest reason I like Vanguard over Fidelity, Vanguard is a non-profit whereas Fidelity is a privately owned for profit company.

[Northwestie]

I've not see Ginnie Mae funds come up much in discussion - are these just too low a return and boring for extra cash?