Posts
9409
Joined
4/1/2008
Location
Mesa, AZ, USA
Edited Date/Time
1/19/2012 10:41pm
Ok am admittedly clueless with the stock market and where to invest--so in these dire straits I have a couple of questions. I work as a contractor for Corporate America and have no 401K, Pension, Health Benefits etc. and yes it sucks but pays the bills.
1) Currently have a ROTH that I contribute $150 per month to, spread out over three different funds that a Finance guy from the credit union helped set up for me about six months ago.
2) My mtg payment is at 5.75% 20 yr loan around $1050 per month. I kick in an extra $100 which brings it to about $1150 PITI. Also at the end of the yr I make an extra payment. If I continue to do this I will have my home paid off in 15 yrs or so and I kind of like that idea. This will save me about $64K over the life of the loan. Never really understood the concept “you don’t want you’re house paid off”. I have no other bills except Health Insurance that is about $220 with a HIGH DEDUCTABILE. I pay off my credit card every month, usually averages round $1800.00. I know that sounds high but it seems there is always somebody in my pocket for something….. lol
3) Should I take the $150 from the ROTH which is losing $$ and put it towards the mtg payment to save more Interest $$ that is a freaken ripoff imo?
4) Just leave it as it is and continue on and hope for the best.
I know I asked these type of questions before and appreciate the feedback but times have changed considerably,
Thanks,
Gary
1) Currently have a ROTH that I contribute $150 per month to, spread out over three different funds that a Finance guy from the credit union helped set up for me about six months ago.
2) My mtg payment is at 5.75% 20 yr loan around $1050 per month. I kick in an extra $100 which brings it to about $1150 PITI. Also at the end of the yr I make an extra payment. If I continue to do this I will have my home paid off in 15 yrs or so and I kind of like that idea. This will save me about $64K over the life of the loan. Never really understood the concept “you don’t want you’re house paid off”. I have no other bills except Health Insurance that is about $220 with a HIGH DEDUCTABILE. I pay off my credit card every month, usually averages round $1800.00. I know that sounds high but it seems there is always somebody in my pocket for something….. lol
3) Should I take the $150 from the ROTH which is losing $$ and put it towards the mtg payment to save more Interest $$ that is a freaken ripoff imo?
4) Just leave it as it is and continue on and hope for the best.
I know I asked these type of questions before and appreciate the feedback but times have changed considerably,
Thanks,
Gary
I do have what was once $20K from a 401K from previous employment but I can barely look at it these days. It’s in two separate accounts with Smith Barney. I need to get it in one acct to stop paying the admin fees.
5) Also have a savings acct with ING which is a European bank that had good % rates before the shit hit the fan. I put $200 per mo in there too. Another alternative is to put the ROTH $150 in my ING acct.
Making 13 payments a year is a great way to build equity.
The questions you have to ask yourself are with regards to taxes and growth expectations.
I assume you're making the max contribution to the IRA with pre-tax dollars. If you put those same dollars towards your equity, 1) they are taxed $$ and 2) as you accelerate the reduction of your loan balance, the annual deduct (assuming itemized deducts) also goes down. Sort of a double whammy, tax wise. But you get to burn the mortgage sooner. And you're being patriotic according to some.
As far as expectations, do you think your house will appreciate faster than your IRA over the long haul? Also, the IRA is a cash nest egg. The house is not as liquid. If you keep going like you are, you're going to end up with both the free and clear house and a barrel of cash. That's a nice place to be.
But some people really like the idea of burning that mortgage ASAP. Then you can quit working sooner. Or take your mortgage payment and invest it, instead. If there's anything worth investing in.
I JUST TURNED 50. I’D LIKE TO STOP WORKING ASAP BUT SEE MYSELF WORKING TILL 65. REBALANCE THE ROTH TO WHAT? THAT GOES BACK TO ME NOT KNOWING WHERE TO INVEST.
Making 13 payments a year is a great way to build equity.
WITH AN EXTRA $100 PER MO PLUS MY EXTRA PAYMENT IT COMES OUT TO 14 PAYMENTS PER YR.
The questions you have to ask yourself are with regards to taxes and growth expectations.
I assume you're making the max contribution to the IRA with pre-tax dollars. If you put those same dollars towards your equity, 1) they are taxed $$ and 2) as you accelerate the reduction of your loan balance, the annual deduct (assuming itemized deducts) also goes down. Sort of a double whammy, tax wise. But you get to burn the mortgage sooner. And you're being patriotic according to some.
I DON’T THINK I AM CONTRIBUTING THE MAX (6K?) TO THE ROTH.
As far as expectations, do you think your house will appreciate faster than your IRA over the long haul? Also, the IRA is a cash nest egg. The house is not as liquid. If you keep going like you are, you're going to end up with both the free and clear house and a barrel of cash. That's a nice place to be.
But some people really like the idea of burning that mortgage ASAP. Then you can quit working sooner. Or take your mortgage payment and invest it, instead. If there's anything worth investing in.
I PAID $109,000 FOR MY HOUSE 13 YRS AGO. RE-FIANCED ABOUT 3 YRS AGO FOR $120,000. ONE PART OF ME WISHES I HADN’T BUT I WANTED TO GET OUT OF THE 3O YR LOAN AND WAS NERVOUS ABOUT WORK AND WANTED SOME SAFETY $$. AT THE TIME (3YRS AGO) THE HOME APPRAISED FOR $290.000. IT’S PROBABLY PRETTY CLOSE TO THAT NOW IF NOT A LITTLE MORE.
I HAVE NO KIDS SO MY PLAN IS TO EVENTUALLY DO A REVERSE MTG AND LIVE OFF THAT IF NOTHING CATASTROPHIC HAPPENS. EITHER THAT OR FIND ME A RICH SUGAR MOMMA!
THANKS FOR THE ADVISE WHIP.
BTW, I TRAVELED TO A FEW RACES WITH CODY FROM SACRAMENTO, HE;S GOOD FRIENDS WITH MY CUZ.. CODY RECENTLY GOT MARRIED.
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Trust me I'm not going to do anything drastic, but I already admiited "I don't know crap about the stock mkt".
Depending on the month, day and if the stars are aligned just right you can get some decent advise on here. Not gonna sell the farm, but ideas from different people never hurt.
fucking conman...
Sit down with someone live or hook up with Schwab or a similar entity who have people you can deal with directly, or use their tools to get a sense of what your risk tolerance is and plug that into their guidelines.
If you are just getting your feet wet with investments and retirement planning, you should check out some websites that can explain the ins and outs and do's and dont's of investments and strategy. Some, off the top of my head, are www.fool.com, www. kiplinger.com, www.smartmoney.com, or www.bankrate.com.
These sites should get you familiar with a variety of different investment vehicles and when/why each may be a good fit for you.
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