Ask Money - Most Recent
What I understand from the research I've done is that the housing market has just about matched inflation over the long term, whereas the stock market has done the best of any investment in any 20 year (or so) period. I'm not just talking about the latest crash, but the scope of the last 120 years. Why do we still want to think of home ownership, and not wealth building, as the "American Dream" to the point where we are still, after the burst of a painful boil/bubble, allowing people to borrow more than they can afford? Personally, I have no desire nor aptitude for home repair and condos seem far riskier than index funds. Why not throw some money away by renting and invest more in the stock market, rather than just barely keep afloat by paying a mortgage and throw money away repairing a home?
In about 2.5-3 years my husband and I have a balloon payment due on a second mortgage. The mortgage amount is 42,000 that we will need to pay back. After the addition of twins to our family in dec. 2011 I became a stay at home mom and while we are mostly breaking even we aren't making a dent in that balloon and have no idea at this point how we are going to pay it back. Our house value is underwater and all attempts so far at refinancing have not resulted in anything. The solution seems to be to take a loan from our 401K but I am sure that there are all sorts of things that I am not realizing or thinking of since the number one rule of retirement finance seems to be "don't touch the 401K". My husband currently makes 100K a year at a stable job. That will never increase but he gets variable bonuses twice a year equaling about an additional 30K. He is 31 and has 190K in his 401K. I have about 90K in retirement savings between a roth IRA and my 401K that I rolled over after leaving work. In a few years I may go back to work but right now that is up in the air. We are just worried that when the balloon payment hits our only option at that point will be to borrow from the 401K and were wondering whether doing it now versus then made more sense. We would certainly save a lot of interest in the mean time on the mortgage.
We have several other debts as well that we are working on including car payments, student loans, and an IVF loan. In a few years our financial situation will be greatly improved with paying some of these off but we will still have the second mortgage to contend with.
Any thoughts would be appreciated,
Thanks, Gin Braband
My husband and I have no credit card debt but we have $130,000 in student loan debt. We have a 4.5 percent fixed interest on our mortgage and 26 more years on the loan. We have $15,000 in savings. After our bills (not food, clothes, entertainment etc) are paid we have about $3,000 a month. What is the best way to budget that money? We do not have any investments and we have an infant baby.
I have been unemployed or underemployed for several years now. I'm ineligible for unemployment and not likely to be hired anytime soon. I am 54 years old and own a home with an adjustable-rate mortgage. The monthly mortgage payment is far lower than rent would be if I were to move. I also have some money in a 401K retirement account.
The sad fact is that I need money for living expenses, and that means either sell stock from my 401k or sell my home. But I have no idea how to quantify which of these bad options is worse. Can you help?
My husband and I are both public school teachers. We have 403b retirement accounts, state-supported teacher retirement system pensions, and other savings accounts, including a 529 plan for our 12 year old child. It seems to me that we are putting a significant amount of money into these accounts, but have little left over to spend on things we can enjoy now such as family vacations. How do we know how much to save without compromising our current quality of life? I would like to be able to enjoy life more now, not save everything for the time when we retire. I do not want an extravagant lifestyle, I'd just like to enjoy our time together as a family while we still have it.
I have about a quarter of my retirement money with a financial advisor who charges the following: The advisor gets 1 percent of assets under management; 0.2 percent goes to the third-party custodian; 0.3 percent goes to the company that decided the asset allocation that was set up, based on my age, answers to questions about risk, volatility.
Now I find out there is an expense ratio for the ETFs; as well as the costs of commissions when buying and selling the ETFs to rebalance, as well as something called the bid/ask spread. I am thinking of moving this money to Vanguard.
I am 35 years old and only began saving for retirement this year through a combination of a 401k and Roth IRA. I would really like to return to school in three or four years to get a double-Masters in economics and finance, taking off one year to study Chinese in China. I know that I will earn twice as much once I complete my degrees as I earn now, but I am concerned about stepping away from full-time work and benefits for five years while only taking part-time jobs or internships in my new field. While I am in school and traveling, although I will be able to support myself financially, I won't be saving for retirement. Can I really afford to go back to grad school to make more money?