Investment Thread - For all your money needs

[leftcoastdeac]

Current investment/money strategy:

Maxed out ROTH IRAs for 2010/2011 for both my wife and I, saving now for 2012 contributions.

Maxing company matched 401K contributions

Refinancing from 30 year to 15 year mortgage to pay off house and turn it into investment property.

Paid off Vehicle loan to open up cash flow.

Paid off Student loan to open up cash flow.

Using extra cash to invest through brokerage right now.

Have plenty of liquidity at this point based on where we are in life, but working on establishing a few additional lines of credit.

No day trading right now - seed money is available, but I lack the time/interest to get into it right now.

[TWDeac]

Current investment/money strategy:

Maxed out ROTH IRAs for 2010/2011 for both my wife and I, saving now for 2012 contributions.

Maxing company matched 401K contributions

Refinancing from 30 year to 15 year mortgage to pay off house and turn it into investment property.

Paid off Vehicle loan to open up cash flow.

Paid off Student loan to open up cash flow.

Using extra cash to invest through brokerage right now.

Have plenty of liquidity at this point based on where we are in life, but working on establishing a few additional lines of credit.

No day trading right now - seed money is available, but I lack the time/interest to get into it right now.

I can't wait till my student loans are paid off.

[leftcoastdeac]

I can't wait till my student loans are paid off.

It is kind of daunting to cut a big check like that, but knowing that I'm paying my loan of years in advance and saving tons of $$$ in interest feels GREAT.

[DrummerDeac]

It is kind of daunting to cut a big check like that, but knowing that I'm paying my loan of years in advance and saving tons of $$$ in interest feels GREAT.

Were your student loan interest rates higher than your mortgage rate? I'd be surprised if so. I have prepaid a bunch of my student loans (not the full principal, but more than the minimum), but also extended the repayment to 25 years so I at least have the option to pay slower. I figure at this point, as much as I want to get rid of the debt, it probably makes more sense for me to save $ and have liquidity so I can buy a house down the road, than to pay off debt at really low interest rates.

[TWDeac]

It is kind of daunting to cut a big check like that, but knowing that I'm paying my loan of years in advance and saving tons of $$$ in interest feels GREAT.

I have no where near enough money to pay them off. It will be awhile before it gets to that point.

I just need to get them to a manageable point so that I can move on with my life. Thanks, Wake

[TWDeac]

Were your student loan interest rates higher than your mortgage rate? I'd be surprised if so. I have prepaid a bunch of my student loans (not the full principal, but more than the minimum), but also extended the repayment to 25 years so I at least have the option to pay slower. I figure at this point, as much as I want to get rid of the debt, it probably makes more sense for me to save $ and have liquidity so I can buy a house down the road, than to pay off debt at really low interest rates.

My interest rates are all around 6%. What is a good mortgage rate these days?

[DrummerDeac]

My interest rates are all around 6%. What is a good mortgage rate these days?

Wow... no idea about mortgages, I would guess somewhere between 4.5-6%? I'm surprised your rates are that high; when did you go to school?

About half of mine are fixed at 5%... I'm paying these ones off in 10 years.

A quarter of them are fixed at 6.8%, but with e-statements/automatic payments, the rate is reduced to 4.3%.

Then the rest are variable, and the effective rate with autopay is like 1.7%. I know they might go up eventually, but right now I am happy with paying the minimum. 1.7% is ridiculously low.

ETA: I just figure, when I eventually do get a mortgage, it will likely be higher than at least the lower two %s I'm paying, so there's no point in prepaying those vs. saving money.

[TuffaloDeac10]

My mortgage is 4.78%, IIRC. My student loan interest rate is higher.

[DrummerDeac]

Good to know!

[leftcoastdeac]

Wow... no idea about mortgages, I would guess somewhere between 4.5-6%? I'm surprised your rates are that high; when did you go to school?

About half of mine are fixed at 5%... I'm paying these ones off in 10 years.

A quarter of them are fixed at 6.8%, but with e-statements/automatic payments, the rate is reduced to 4.3%.

Then the rest are variable, and the effective rate with autopay is like 1.7%. I know they might go up eventually, but right now I am happy with paying the minimum. 1.7% is ridiculously low.

ETA: I just figure, when I eventually do get a mortgage, it will likely be higher than at least the lower two %s I'm paying, so there's no point in prepaying those vs. saving money.

Yes, my student loan interest rate was higher than my mortgage rate, although not a lot.

15 year mortgage rates are averaging under 4% nation wide right now with 30 year rates around 4.75%

[TWDeac]

Wow... no idea about mortgages, I would guess somewhere between 4.5-6%? I'm surprised your rates are that high; when did you go to school?

About half of mine are fixed at 5%... I'm paying these ones off in 10 years.

A quarter of them are fixed at 6.8%, but with e-statements/automatic payments, the rate is reduced to 4.3%.

Then the rest are variable, and the effective rate with autopay is like 1.7%. I know they might go up eventually, but right now I am happy with paying the minimum. 1.7% is ridiculously low.

ETA: I just figure, when I eventually do get a mortgage, it will likely be higher than at least the lower two %s I'm paying, so there's no point in prepaying those vs. saving money.

I went to school from 2006-2010.

That is a ridiculously low rate reduction for e-statements/direct debit. All of mine give only a .25% rate deduction.

I have two that are 2.75% variable rate, but I've never been able to find out the actual rate from cycle to cycle. I haven't called though.

[deacinwnc]

I'd probably open a Vanguard account if I had lots of money. You need at least $3,000 to open an account with them and for most Vanguard funds, at least $10,000.

I've never been inside an account, so I can't make many judgments, but most reviews I have read aren't that good about their brokerage options and support.

I'd encourage you to do some research if you're actively thinking about opening up an account somewhere.

Vanguard's mutual funds are great. They have some of the lowest expenses around. I can't speak to the brokerage option because I don't trade individual stocks anymore, I only invest in mutual funds. But the website for mutual funds is pretty easy to use.

[TWDeac]

Vanguard's mutual funds are great. They have some of the lowest expenses around. I can't speak to the brokerage option because I don't trade individual stocks anymore, I only invest in mutual funds. But the website for mutual funds is pretty easy to use.

When I get $3,000 I might check it out.

I like the $4.95 brokerage fees at tradeking, though.

[deacinwnc]

You're right most of the funds start at $3000 but Vanguard does have have one stock/bond hybrid fund which starts at $1000. It's the STAR fund. Expenses are pretty reasonable too.

[DrummerDeac]

I went to school from 2006-2010.

That is a ridiculously low rate reduction for e-statements/direct debit. All of mine give only a .25% rate deduction.

I have two that are 2.75% variable rate, but I've never been able to find out the actual rate from cycle to cycle. I haven't called though.

I know! That's why I haven't consolidated them, I would lose that reduction. My variable ones only have a .25% reduction also.

Too bad I don't have $ to buy a house now. It would be nice to get a 4.7% mortgage.

[TWDeac]

You're right most of the funds start at $3000 but Vanguard does have have one stock/bond hybrid fund which starts at $1000. It's the STAR fund. Expenses are pretty reasonable too.

I saw that one as well. I'm probably going to hold off until I have enough for some of the other funds.

[DrummerDeac]

When I get $3,000 I might check it out.

I like the $4.95 brokerage fees at tradeking, though.

I use Schwab for my mutual fund investing... when I signed up, you didn't need to have the minimum $2-3k as long as you signed up for monthly deposits of at least $100. That's one of the reason I picked them, and they have decent no-fee funds as well.

If you're going to be trading stocks, I agree that having a low transaction cost is important, so TradeKing or Zecco would be a good way to go.

[TWDeac]

I use Schwab for my mutual fund investing... when I signed up, you didn't need to have the minimum $2-3k as long as you signed up for monthly deposits of at least $100. That's one of the reason I picked them, and they have decent no-fee funds as well.

If you're going to be trading stocks, I agree that having a low transaction cost is important, so TradeKing or Zecco would be a good way to go.

I'll have to look into Schwab. Sounds like a good deal.

[bmoneydeac]

i use scottrade for my mad money. got in when the market went in the toilet in 2008 and actively follow about 10 stocks. nothing too scientific, but i tend to get in when i feel there is a little dip and get out once i feel like my return is sufficient. so far i've made probably 30 trades and only lost money on 1 of them. my money is up 150% since i started. i'm sure there is an element of luck to it, but i'm not complaining.

[Dented]

Sounds like a lot of peeps on this thread should look up the term "opportunity cost" before making the decision to pay off loans.