| Something I have not seen mentioned yet, it might be obvious? Pay off your debt first!
It has a guaranteed return on "investment". The following scheme has worked well for me. First take any employer matched retirement scheme (401(k) / IRA, etc.) and keep some money to build up a rainy day fund if you don't have one (a few weeks income is a good starting point) as theres no point defaulting on a loan because you made extra payments the week or month before. But there is no point saving or investing money that could be going towards paying down a 22% credit card debt or 16% car loan, or even a 5% House loan. The only exceptions would be low interest loans (i.e. <1-2%) with a fixed payoff date. On Mortgages, there are many schemes but I'd advise, 40% 1 year fixed, 40% 2 year fixed, 20% revolving credit, dump any rainy day funds, and any other spare funds, on the revolving loan == interest you don't pay. Keep the fixed term loans expiring every other year so any interest rate spikes only hit half your capital. Disclaimer: I am not a financial adviser and this is not intended as "investment" or "financial advice". |