Debt Free Lifestyle Today
Longer term planning with only 10K — how to make it grow, realistically?
would you
1. pay some of your mortgage down
2. invest in stock market – but in today’s economy?
3. get dental work done (not emergency, but you are hitting middle age and need some done before they all fall out and you know down the road you will not have another 10K at your disposal again…)
4. take a family vacation and just put the rest into savings
5. open a retirement account (say you have 5K only in one now… and a small pension coming later in life and a home you will sell later on — 15-25 years down the road which should net a few hundred K)
your longer term goals are be debt free (currently are, well except the mortgage – no cc debt – all paid off and all but one was canceled for emergencies you canceled..no car payment either its paid off now), have a small condo when you retire and car with no car payment.. and enough to pay bills and for some going out to dinner and such – no lavish lifestyle planned…
If you haven’t set aside at least 7% of your pay for retirement all your life and your pension isn’t going to pay at least 50% of your income prior to retirement, the stats say that you are unlikely to have a particularly comfortable retirement…not if you retire before age 70. (The age of maximum SS benefits)
Your best return for the money is probably a Roth IRA and an emergency savings fund (if you don’t have one).
$10k isn’t enough to make much of a dent in much else without decades to grow.
Unless your house is currently worth more than $100k than you paid for it, the stats also say that it is unlikely to net as much as you think it will. Home ownership has generally been oversold — average returns over long periods of time are just barely over the rate of inflation. What this means in real terms is that $200k in 25 years will likely only buy as much stuff as $35k will in 2009. Not nearly the nest egg people expect. Tack on to that problem the expectation that the current housing problem may take 5 to 10 years to clean up and you may have decades of returns below the rate of inflation.
United Financial Freedom – Debt Free Lifestyle