Kinda off topic, if you were handed....

Me, 50% on mortgage, 50% into the highest yeilding cd I can find. What would you do. Seriously honest answers please.

Larry

I "invested" this year's bonus in new windows for the house. Not sure if the fuel savings will offset the cost of them, but the house is much more comfortable and it put the money back into the local economy.

Paying down principal on the mortgage (or any other high dollar loan) gives you a huge saving at the end.

Naw, just kidding. I'd get the heads fixed on my S-10, get the 4x4 fixed, and get new tires for it. Pay my dad for the overages on my cell phone bill this month (you know why) I dunno, I'd take care of my big expenses staring me in the face right now, and squirrel the rest away until I start farming and can spend it properly. Probably put a few k in an IRA, and a few more k in CD's.

No mortage, 0% loan on my truck so no advantage to paying that down, no other debt.

The balance would probably go into savings, as my IRA and 401K are comfy at the moment. SWMBO is a little nervous about not having a little bigger stash we can get at if we need it without delays or tax penalties.

Take a look around and see if you can find a mutual fund that invests in inflation-linked bonds as place to park it. (Be sure to look at any fees or restrictions on withdrawals, and figure that into your plan.) If when you go to do your taxes next year (or this for that matter) you find you're doing okay and you don't need as much cushion/liquidity, you might draw on that money to make a maximum IRA contribution for the prioyear, and still have some cushion left.

One thing to look at, anyway.

1/10 to God
And then probably:
3/10 on the mortgage
3/10 into cash (short term emergency-type funds)
3/10 on some quality stocks - split between growth stocks and dividend yielding blue-chip stocks

*As with any financial advice, the suitability of this depends on your individual situation.

There's a local financial guy that does a Saturday am radio show - keeps saying "the war is against INFLATION - don't win the battle and lose the war!" Makes sense to me. When the market is uncertain and is down, emotions tell us to "hang on to cash"; when the "right" thing to do is buy stocks when they are on sale!

/off my soap box now.

Nathaniel

We think we have planned well enough for the finances to work.... but there is always the oh-**** expense that you can't plan for.

• Hobby farm

Is there weak points in your operation that cost you a lot of money in waste or repairs? Capital upgrades that could save a lot over time increasing profit? Are you in the long haul for farming?

The markets are pretty crazy right now, I watched my retirement savings gains from the last 3 years vapourize in the last few months. No guaranteed investments are paying better than the interest on my line of credit but you don't have debt you say.

I'm not sure how it works in the US, but in Canada our RRSP (your 401K I think) contributions can really pay off for some earning brackets. This money you got, do you have to claim it as income in one year? Can you apply it backwards and forward against other tax returns?

Any land or bank repo property around your area? I hear there are a lot of delinquent mortgages in US now.
Hope this gives some things to think about.

stevermary

stevermary