I am looking for a little direction in making my next financial decision and was hoping I might be able to obtain a little input here before I make any moves... Basically, I have an excess of cash from savings and a recent cash-out home mortgage refinance and I can’t decide if it would be more prudent to pay off the remaining short-term loans, invest the excess cash in my Roth IRA, or possibly a combination both.
I have been planning to invest in Vanguard index funds starting with the Total Stock Market fund. However, I am hesitant to pull the trigger on the $3K minimum with the Vanguard index funds after having seen the stock market sky rocket in the last couple months. I wanted to get started in November but did not get my previous employers 401k rolled over to Vanguard Roth IRA or received the refinance check until the end of December when the market had already risen pretty substantially. I realize you shouldn’t give in to the temptation of timing the market.. but when starting out and needing to meet the minimum investment, and possibly investing much more in a lump sum, I feel like it is a little harder to look the other way… no?
Anyways, below is what my financial situation looks like. I’d really appreciate some input on if people think I should pay off the loans, invest the money, a combination of both, or maybe wait a couple months for the market to rebound a little bit...
- Age: 28 Years Old
- Income: $50-55k / yr
- Other: No Kids / Not Married
- $251,000 - Home (Appraised Value as of November 2016)
- $40,000 - Bank Checking Account
- $12,000 - Current Employer Traditional 401k Account (Stopped contributing in 2017 as employer match is only 2% and fee's much higher than just funding my own Roth IRA..)
- $3,000 - Roth IRA / Money Market Account at Vanguard
- $160,000 Home Loan (25 Years @ 3.50% Fixed / First Payment is Feb 2017)
- $16,000 Auto Loan on 2013 Volvo S60 T5 (5 Years Remaining @ 3.59% Fixed)
- $3,500 Student Loan (4.25 Years Remaining @ 6.55% Fixed)
Brian (Investment Newbie!)