Emergency funds aren't there to pay huge returns; they're in place to be available when you need them, should an emergency arise. Say your washer dies, or your fridge...you don't want that money tied up. Funds that are expected to draw a decent rate of return are NOT your emergency fund. You don't want to "unplug" your investment money if your transmission goes out; that's what the SEPARATE emergency fund is for.
Now, if you have an actual year's worth of expenses sitting in your emergency fund, you're set...on that end. THEN your extra money goes toward either reducing/eliminating debt or building your SEPARATE investment account(s).
As far as debt goes...are you down to ONLY the mortgage? If not, GET THERE FIRST. If you have other, higher-interest debt, you're effectively taking that monthly payment AWAY from what you have available to invest. So you're costing yourself the interest on the debt, PLUS the rate of return the investment WOULD'VE made you...which makes that debt VERY expensive. Once THAT debt's paid off, and all you owe is your mortgage, apply what your other debt WAS to your mortgage principal and watch that sucker disappear.
When you're completely debt free, no one can take your home or possessions away from you. And you can live your life the way YOU choose.
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Today's Featured Article - A Cautionary Tale - by Ian Minshull. In the early 1950s my father bought an Allis Chalmers B and I used it for all the row crop work with the mangolds and potatoes, rolling and the haymaking on our farm. The farm and the Allis were sold and I have spent a lifetime working on farms throughout the country. I promised myself that one day I would own an Allis. That time event
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