DaveNineFive
Dryer sheet wannabe
- Joined
- Feb 8, 2008
- Messages
- 19
Hey everybody, I was bouncing around these boards a couple of years ago, but stopped checking in as much after I set my course. Well, a lot has changed, and I'm about to have to make some big decisions again! If anyone has any advice or just comments on our situation, I'd love to hear it.
I just turned 27, and I got married about four months ago (I can now start saying "DW" ). I've been saving aggressively towards a home down payment for five years.
Today I'm just about to put all that saving to good use; we're about to buy a home in Madison, WI for $265,000 with $85,000 down. I expect to finance the rest through a 30 year fixed rate loan (should be around 5%). The house is in good shape - we know we'll need to spend around $6k over 2 years on repairs, and up to $10k if we want to pull the trigger on some improvements, but I think that's all pretty typical.
The plan is to over-pay the mortgage every month; I opted for the 30 year to allow for lower payments if necessary (with the move I'm somewhat concerned with job stability).
As of May our situation should be:
$180,000 owed on a home ($85k in equity)
$40,000 owed on DW's student loans
(this will be the only debt we have)
$21,000 left in cash
$33,000 in 401k (currently contributing at 10%)
$6,500 in Roth IRA (not contributing today)
I expect our combined household income to be in the neighborhood of $150,000 annually, but it could potentially be as low as $100,000 (primarily if DW struggles finding a job).
So what I really need is some guidance on what to do with our investment $$ once we have the house. I'd like to start building a portfolio that provides a stream of income which I can reinvest for now and draw on later. What would you recommend?
I just turned 27, and I got married about four months ago (I can now start saying "DW" ). I've been saving aggressively towards a home down payment for five years.
Today I'm just about to put all that saving to good use; we're about to buy a home in Madison, WI for $265,000 with $85,000 down. I expect to finance the rest through a 30 year fixed rate loan (should be around 5%). The house is in good shape - we know we'll need to spend around $6k over 2 years on repairs, and up to $10k if we want to pull the trigger on some improvements, but I think that's all pretty typical.
The plan is to over-pay the mortgage every month; I opted for the 30 year to allow for lower payments if necessary (with the move I'm somewhat concerned with job stability).
As of May our situation should be:
$180,000 owed on a home ($85k in equity)
$40,000 owed on DW's student loans
(this will be the only debt we have)
$21,000 left in cash
$33,000 in 401k (currently contributing at 10%)
$6,500 in Roth IRA (not contributing today)
I expect our combined household income to be in the neighborhood of $150,000 annually, but it could potentially be as low as $100,000 (primarily if DW struggles finding a job).
So what I really need is some guidance on what to do with our investment $$ once we have the house. I'd like to start building a portfolio that provides a stream of income which I can reinvest for now and draw on later. What would you recommend?
- 401k - I currently invest 10%, but my company recently stopped matching contributions and will not resume until Jan 2011 at the earliest.
- Roth IRA - I stopped investing here in favor of house savings. I could certainly resume adding cash.
- Paying off the house - I know I will be doing this to some extent, but how far should I take it?
- Post-tax investment funds - I believe conventional wisdom is to ignore this until one maxes their 401k and Roth, but I'd like to start building a balance in some no-load index funds or something that will provide a revenue stream.
- Other?