With this year pretty much on auto-pilot for our finances (know the order debts are being paid off and when, income set for the rest of the year unless we add a new revenue stream), I've been thinking big time what is the path we go on after these CC and misc debts are paid off and we have $9K in our emergency fund. It's still a year away, but I figure now is the time to start planning. Here's the paths I see available:
- Pay down student loan and mortgage debt: This has a guaranteed return on investment of 6% overall. I know I really want to get our mortgage under 80% to get rid of the $71/month PMI, which will take $10K
- Invest in the stock market (eg: S&P 500): I forget the exact long-term average for S&P 500, but it's like 10% in the long-term.
- Build a business: We've got several ideas floating around over here that would require some, but not much money to get started. The chance for losses and gain are large.
- As my wife describes it, go back to our old ways and splurge. This has a guaranteed return on investment of 0% to -30%.
It's probably going to end up being a mix of the first 3, just finding the right balance will be the hard item. Our goal is retirement at 42, though theoretically I'll be halfway to retirement in a year (currently living off 50% of my day-job income, the other 50% is going to those debts right now).