Saturday, August 25, 2007

If not the world, at least our heads are going round

This household is embarking on a new chapter in our financial life: actual investing. We've done CDs, but that's the most I've done before. Eric's owned stocks, so it's not new to him--but our general financial situation is. Items:

-The driveway is going to cost us around $6000 to fix. We've accepted this. What's more, we have the money to pay for it. (Partly because of my mom's gift around last Thanksgiving.)

-Eric's tuition is going to cost us $1000 this semester and $2000 next semester above financial aid, because we've decided (read: I urged and he agreed) we will decline all but the subsidized loans so that we pay less interest.

-Our only debts are student loans, Eric's car loan, and the mortgage.

-We're putting away a nice amount every month in savings.

-We've decided we want to keep $8000 liquid as emergency money, and we have that and more.

So, we're putting $5000 into an investing account and buying some mutual funds, some high-risk, some moderate-risk. We'll put in more as we can (though we'll keep some in CDs too), and Eric wanted to apply for margin, which is basically a loan from Ameritrade (or whatever), but the interest rate is 10% or so, so we might consider getting a low-interest credit card and using the cash advance for extra investing money. Maybe not. I'm a little leery of this--we had to discuss it for a while before I would agree that investing makes more sense than paying off the student loan first--but it does make numerical sense, assuming terrible things don't happen to the stock market in the next few years, and we're in a position where we can stand some loss.

Eric keeps shaking his head and saying he has to get used to this feeling of doing well. He'll get used to it. And with our plans (kids, moving) we may never be doing this well again, so he'd better enjoy it. I am.

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