Pay the mortgage off. That should be enough said, unless you wrote down your mortgage wrong.

You make too much to participate in the Roth IRA, unless you invest before the new "loop-hole" runs out. You're 27 years old, going into the stock market making as much as you do would be smart decision...up until you are about 35 (you shouldn't have a low-tolerance at your young age). Consult someone that can help you. Stocks wouldn't be the best for you, but a few buy-and-hold mutual funds could work well with your age and income. But first, pay off the mortage (if you did in fact right the amount down correctly).

Another alternative is, if you plan on having children, put it away into an HSA type account and let it grow interest until your future child is 18. I think $35,000 is enough that even at a low interest rate it could still grow to pay for all of your child's tuition needs. If you want to earn more aggressively...look into a nice mutual fund that invests in mainly dividend stocks, and then re-invest the dividends. That would actually be the option I would recommend the most, if you were a client of mine.

I agree with C9Consulting here..

If that is your mortgage figure.. Pay your house off! There is NO investment that will earn you $600-$1100/month (or whatever your mortgage payment is) for $35,000.

The money you save each month on mortgage payments alone should make that a no-brainer.

Even if you're looking to buy another home in a year or two.. PAY THIS HOUSE OFF.. and OWN IT outright.

Then.. start savings those mortgage payments you used to make and build up some cash.

When you want to get a bigger home.. sell the one you own and BUY IT A NEW HOUSE CASH!

At 27.. if you have a paid off house.. you're a rare person indeed.

Hey David,

Paying the morgage off would be a good thing but then you wouldnt be able to use that money to grow. I would suggest putting about 10k in the morgage then investing the remainder. I can help you grow your investment faster then any mutal fund or IRA out there. Plus you will be able to control your account and take out money anytime you need it without penalty. I can produce an average return of 7% per month for you. If you interested check my post on this forum and leave me a message. I would be glad to answer and/or give you any information that you need.

Mark

Thanks for all the feedback guys. Yes, the 35K figure is correct. I bought my house as a "short sale" for around 75K, put down 20K (my savings at the time) and have a 15 year mortgage at 5.6%.

I don't know what "buy and hold" is, unless it's exactly as it sounds, which is further proof that I really need to go talk to a pro. I spoke to a rep from Edward Jones today, maybe he can point me in the right direction. In any case, the house appraised last November for 145K so, in essence, this could be considered a "flip" of sorts

I have a hard time trusting people with my money and with so many different people saying different things ("buy silver!" "the dollar is worthless!" "go international!" "IRA!" "Index Annuity!", etc) its really tough. Hell, the most I've ever done as far as "investing" is buying bonds and sticking them in my safe deposit box. I really envy you guys' knowledge on the subject. Makes me wish I would've went to school for finance instead of what i went for.

I do? I only make about 65K a year. The 100K-110K is my wife and I together. We're not hurting for cash but we're certainly not rich.

Turftoe, while I agree that the money should be in a position to "work" for David. Real estate is considered an investment and as his house appreciates, after paying off his mortgage, it would be considered as his money working for him. After he sells the home it will probably be for a better return on investment than he could ever get from equities. As seen because the house is valued at 145k now. You can do the math to see the return is higher than the regular 8-11% gained from equities investments.

TX911, sorry, I didn't realize that the 100K was you and your wife together. My mistake.

Buy and hold, is when people invest in companies such as Microsoft, Walmart, GE but they don't touch their investment in these companies for 15 years or more. Buy-and-hold strategies is the consensus choice among the majority millionaires who invest for themselves.

No worries man, I appreciate all your input!

I wonder what happens to buy and hold shares if there's ever a company merger and if that's good or bad. I'll definitely ask about this with the finance rep. The more I research, the more I think I'm going to start one of these Roths and also invest in some different mutual funds that maybe have a little higher risk to them separately. I'm going to keep buying my bonds I think as well and keep stacking them in my safety deposit box.

If there's a company merger, stocks usually go up or down depending on who they merge with. Either way the acquiring company generally compensates the stockholders of the acquired company accordingly. Because, when there is a merger all the stockholders are merged into one. And no one wants to alienate the new stockholders.

You're doing better than you think. And you may only need a rep to help you find the investments themselves and help you allocate them correctly with your age. You already have the diversification down, which tends to be an important factor that people skip on.

Thanks again, I really appreciate it. Kind of off subject but another thing I've been doing for about the past year is buying a couple of ounces of silver bars per paycheck and sticking them in my safe deposit box. Does anyone have any thoughts on precious metals?

I would never buy and hold a stock for a long period of time. This is very dangerous. People often think that they can just buy a stock, hold it for years and make a decent return. WRONG! Not in this market. I dont care what the company does, what it makes, what product or service it sells, or what other people or media think about it. I dont care about any of that. Bottom line, are the institutions putting money in or taking money out of that stock. Thats all! Why, because institutional money is what drives the stock up or down. If I know that institutions are buying that stock, then I want to buy it. And when they are pulling their money out, I want to pull my money out too. Its that simple. It took me several years to learn how to follow the institutional money in the stock market. They dont buy and hold, they are always moving their money place to place. Daily, weekly, and monthly their money is going from stock to stock. I can tell where the money is going simply by reading a chart. Im always looking at the market and stocks short, mid and long term. But if you dont have time you can learn to find the long term trends. You can get in a few stocks and hold them for a month to 3 months and get out with a decent profit. A stock can only go up 1/3 on its own without the market behind that stock. So to get in at the best possible time on a specific stock you want the market behind it. You dont want to chase the market, you want the market to come to you. If you know what to look at on a chart then you got yourself a decent investment with little risk. Theres a chart that your broker does not want you to know about. Why? Because it shows if that stock will go uptrend or downtrend for the next 3 months. Brokers dont want you to sell same with mutal funds. They are always buying their clients stocks at the worst possible time.

"Not in this economy" is what you said. Investors that make billions, don't say "in this economy." Maybe ones that make millions do, but not the ones that make hundreds of millions. "In this economy" is short term and the antithesis of buy-and-hold. Buy-and-hold says this economy is when I should be buying as many shares in blue chip stocks as I can afford.

Btw those that invested in Apple in 1995 (back when it was $10 a share), would sorely disagree with you. If they bought 1000($10,000 worth) shares in Apple then, and held throughout two recessions and the ".com bubble" bursting, they would have a total of $249,940(259.94-10=249.94*1000=).

Buy and hold works, time after time, year after year. Go to any long-standing major successful company and look back 15-20 years. You'll see what I mean. Also you are half-right in thinking that it's what the institution buys. Equities are trading on supply and demand structures. If a lot of people want a stock, the price goes up. If a lot of people want to get rid of a stock, the stock falls. It doesn't even matter what the financials are. If I got 1 billion people to buy 10-50 shares of stock worth $5, the stock price would sky rocket(even if it was clearly in the red). Of course I could never get that many people to buy stock in an unprofitable company...but that's how the market works. The only reason the stock goes up when institution buys more is, because they have so much buying power that they can change a stock price just by getting a couple of other institutions to buy millions worth of a stock. And then other people see the stock going up and they buy, and then the stock price goes up even higher. But ...the investors who held onto the stock before the institution bought millions worth, made the most money. Hence, buy-and-hold.

TX911, precious metals are fine. However, they are only based on perception not on actual value. What I mean is that, when a civilization crashes people say that metals will be the main trading pieces. In actuality, it will be things like clean water. So investing in metals is like investing in US dollars (value is based on thin air without gold backing).

If you have billions of dollars then you can buy and hold. Warren Buffet can do this because they can afford to buy tons of shares for a long period of time. By the way, your estimate on the money they would have made on their 10,000 investment is inaccurate. The stock split twice after 2005. Your math is wrong.

It doesnt matter what the financials are? LOL! Are you kidding me? Do you even know what leads the freekin market? Financials always lead the market up or down. Goldman Sachs is basically the market. It doesnt matter what cnbc tells you or any other public information source out there tells you. Financials lead the stock market.

Buy and hold can work but its not the best investment strategy. The reason is you have no idea what stocks will continue to uptrend for a long period of time. Just because you buy it doesnt mean that the stock is going to be much higher years down the road. Look at CSCO. pretty big company. Yeah the stock soared up to 100 a share, but then what happend? The institutions started taking their money out and guess what? The stock tanked. Its now trading at 23 dollars. If you could read a simple chart, you would know to start taking profits around 100. If you were to just hold it, well I guess you would bend over with no vaseline.

You dont buy a stock and hope institutions will buy it. You want to first see if the institutions are supporting that stock at a certain price and you also want to see if they are putting more money into that stock. Thats when you buy it. Then after the stock price goes up you want to see were these institutions are no longer supporting that stock and were they are taking their money out. Thats were you get out and take your profits. Even better, is you short it on the way down.

If you buy and hold, you cannot make money on both sides of the market. A stock just doesnt go straight up. It takes time and has many many up and down trends along the way and most stocks dont continue to go up.

Investing metals is like investing in the dollar? WHAT? Do you even know the effect that the dollar has on metals, mining, and commodity service stocks? The opposite.

You want to buy these service stocks when the dollar is falling. When you have a weak dollar these stocks will be strong.

You think you know how the market works but its ovious that you dont have a clue. Quit listening to these idiots on cnbc.

The stock split even proves my point further. Stock splits lessen the value of an individual stock. So if they had 10,000 at one point, one stock split puts their shares at 20,000, another stock split puts their shares at 40,000. That means that 40,000 shares at $259 share is a great increase in the original 10,000 shares at $10 a share. So thank you for proving my point.

Again, in actuality what leads markets to go up and down are investors willing to buy. If they don't buy and just sell...markets go down. If they just buy and don't sell...markets go up. It doesn't matter what the financials are. One investor buying up $40 billion dollars of a company stock will make the price sky rocket. Doesn't matter how it's theoreticized, it's just what happens. Why do you think financials lead the market? Because I know for a fact that if someone bought $2 billion dollars worth of Cisco stock, the share price would jump. And that person could base that price off of a hunch. Tell me this...without any financial evidence, why is that when I invested in Apple after the iPad dropped, why did the stock go up between then and the earnings report? No one could've known what the financials were because they weren't available, so why did the stock price go up? Because financials have nothing to do with the price. It's all about who's buying and selling. More people buy (bull market), the higher the share price. More people sell (bear market), the lower the share.

As for CSCO stock, you're looking at what it's earning now. Which is not a way of looking at buy-and-hold. 15 years from now, if the stock is still at $23 (which I guarantee it won't be), then you will be right. But it won't be, because of all the future initiatives and investments that they are making in the future. I would wage you $100,000 that in 15 years, Cisco's stock will be above what it is today.

You said, "It takes time and has many many up and down trends along the way and most stocks dont continue to go up."- this is the key to why buy and hold works. You look long term, past the so called trends. You're focused on small term gains. And you were right about Warren Buffet...but he wasn't always a billionaire He bought and held, and look where he is now.

Investing in the dollar is investing in thin air, the dollar is no longer backed by gold. And therefore is valued at heresay. Hate to say it, but it's true. Metals are also not back by anything but what people put a value on...hence investing in metals is like investing in dollar. Logically, my argument is sound.

Also, I don't watch CNBC. I do know how the markets work, that's how I make money I live on. I trade in the markets...and I'm quite successful at it. I analyze my own holdings and I research my own strategies. And through buy and hold I've made a bunch through Amazon (which made me over $300 in four hours last fall btw) and Netflix. Actually my investment accounts pay for my rent and my food. I also, disagree with CNBC, they give "hot" tips, I prefer due diligence. Everything you think you know about me is wrong. 1) I don't listen to CNBC, except for news updates 2) I'm very successful (hence the people that want me to invest for them when I receive my licensing 3) I don't know how the markets work, my landlord and bank account say otherwise. Think what you want but I'm making my money in this wonderfull recession. I hope you are as well. The only difference is Netlflix, apple, and amazon are paying my bills through buy and hold.

I will give you one thing, you are a way better investor than I. But in the long run(40+ years), my strategy makes more money than yours.

Turftoe and C9,

I think BOTH of your strategies have excellent and proven track records. Rather than argue over whose makes more money (because they both will make money), we should be educating our young friend on the pro's and con's of our "OWN" strategy.

For instance.. can either strategy GUARANTEE TX911 an instant and immediate return of $600-$1100 per month? Can you generate that type of income with a $35,000 investment?

So I'll talk about my strategy...Don't invest into building wealth until you are first 100% debt-free. This means paying off your mortgage. Only then are you in a POSITION to invest...Here are the pro's and con's

PRO's - What ever your mortgage payment was is now freed up in your income. This now gives you whatever amount you were paying before in cash each and every month. You can start investing on a monthly basis while you educate yourself on what works and what doesn't. At this point you may want to invest your money into your retirement instead of investing outside of a tax deferred or tax free vehicle. Still, with that much extra money you may want to put some towards TurfToe and C9's strategies. Just invest monthly.

Con's - having a paid off house is nice, and having extra income is nice.. but now you'll have the temptation to increase your lifestyle with all the extra monthly income. You make conclude you need a bigger house, and then get yourself into another mortgage. This would not be a good idea in my opinion. There will also be other things that you might waste your extra income on (parties, girls, etc.) The only other Con I can thing of is having to pay your property taxes once a year..(which is small compared to how much you WERE paying on mortgage payments)

This is why I haven't started investing for myself yet. I'm working hard to pay off MY house right now. When I do, I'll have $2500 to invest monthly for my future.

Good Luck all!