jIMOh
Thinks s/he gets paid by the post
I am about to start paying down my mortgage early. I do plan to invest the money (not pay down principal), tax favored accounts are full (401ks to point of match, Roth IRAs for both spouses). Current savings rate is 15% of gross income. I am 34, wife is 33. Twin boys due in June. Target ER age is 52 for me. Mortgage is 30 year fixed and will be paid off in 2036.
Here is my question- if you invest(ed) (instead of paying down), do (did) you mix money with other asset allocation, or did you create a seperate account? Do you see problems with one way (consider all assets one allocation) vs another (keep accounts seperate).
My plan is a seperate account for four reasons
1) paying down mortgage was partly wife's idea, I want a visible place for her to see money
2) The money for paying down the mortgage is coming from a second job whose income stream is high, but unreliable (meaning upping 401k contributions would cause budget issues in some worst case situations).
3) in event one spouse loses a job, this account can double as a way to pay normal mortgage payment.
4) The amount contributed will vary between $500 to $2000 per year. I want to track the return of this money to make sure I can invest it better than 5.75% rate on mortgage.
But if there is a problem with this, I haven't thought of it.
FYI- our credit card is tied to mortgage (GMAC). 1% of all purchases pays down the mortgage in $50 increments (charge $5000 to get $50 pay down). This is more of an afterthought than part of the plan. I only charge gas and travel expenses on the card anyway.
Here is my question- if you invest(ed) (instead of paying down), do (did) you mix money with other asset allocation, or did you create a seperate account? Do you see problems with one way (consider all assets one allocation) vs another (keep accounts seperate).
My plan is a seperate account for four reasons
1) paying down mortgage was partly wife's idea, I want a visible place for her to see money
2) The money for paying down the mortgage is coming from a second job whose income stream is high, but unreliable (meaning upping 401k contributions would cause budget issues in some worst case situations).
3) in event one spouse loses a job, this account can double as a way to pay normal mortgage payment.
4) The amount contributed will vary between $500 to $2000 per year. I want to track the return of this money to make sure I can invest it better than 5.75% rate on mortgage.
But if there is a problem with this, I haven't thought of it.
FYI- our credit card is tied to mortgage (GMAC). 1% of all purchases pays down the mortgage in $50 increments (charge $5000 to get $50 pay down). This is more of an afterthought than part of the plan. I only charge gas and travel expenses on the card anyway.