Investing 102

[toy71camaro]

Originally Posted by captainofiron

Thanks Greg

Im almost halfway done with the thread

When I talked to him, I asked if I should consider a Roth IRA. He said no, and I really didnt have anything to challenge back.

Right now things are shifting in my life.

1) I got the new job, where I am earning way more than I used to and now my wife can stay at home

2) We are expecting, baby will be here in December

3) To take the new job we had to move, and currently our house is on sale in a tepid market

4) We have more debt than I am comfortable with, BUT we have a surplus every month. Right now, we only owe on my car, the wife's car and a couple hundred on a no interest jewelery card I got

What I wanted to do is pay off the cars with a snowball, then use that to hit the mortgage on a new house (once ours sells)

We had been doing great prior to buying the house, we had our emergency fund, and were snow balling my wife's old car, but then it got totaled. My paid off car bit the dust a couple months later

In my mind, I should be getting debt free (minus the house) first then start investing (outside of my 401k contributions of course), do you agree?

Thats always been a tough topic. Whether or not to snowball the debt vs retirement.

Dave Ramsey says to attack the debt in full force (everything BUT the mortgage), and do NOT contribute to retirement. It should be a "short time" before you're debt free then hit retirement with a full 15% of your income.

The challenge to that is, what if I'm capable of making 7-12% on my investments/retirement while only paying 3% on my auto loans. I still come ahead 4%.

But, i think its more a comfort feeling myself. I hate payments. I hate owing every month on a car payment. So my feelings tell me to pay the damn car off ASAP. Even if it means i'm losing that 4% possible gain (or whatever it is. you never know).

Personally, we just bought a new to us vehicle. Most expensive thing ive ever bought aside from the house. I've got a 3% interest rate on it. We've got the money to still fund my Roth AND pay the normal note on the car. I'm torn at taking that ROTH money i set aside each month and tack it onto the car payment. But, that makes me nervous. LOL. So, as it sits right now, I'm paying the normal note on the car, stashing the ROTH money in a separate account (but NOT directly into my Roth), so I have wiggle room. If for some reason the market goes south and offers a huge buying opportunity, i have that money ready. If not, I'll let it pile until I can just dump it onto the car and be done with it. No clue if thats the best way to go. But it makes me sleep comfortably at night having that "second emergency fund" just for the car.