Thread: Economics Investments & Personal Finance
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Old 01-25-2013, 09:22 AM   #33
Amnorix Amnorix is online now
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Join Date: May 2003
Location: Boston, Mass.
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Quote:
Originally Posted by La literatura View Post
So, after 25 posts in this thread, here's my initial investment/personal finance strategy:

-- Put 5% of my paycheck into my retirement account (employer matches up to 2%)
-- By the end of my first working year, have $12K in investment vehicles other than my retirement account ($10K in index fund; $1K in managed mutual fund; $1K in online brokerage for my own amusement)
-- Have a pot of money for house down-payment
-- Fund bucket of 3 months emergency fund (about $6K)

And that should dry up my salary due to my remaining loan payments, insurance costs, and living expenses.

Sound good?
The $10K in index fund should be $10K in index fundSSSS. I suppose you could just go in for the total market index or something, but I'd spread across various ones, rather than going for just one.

Saving for a house downpayment makes sense. Remember that you want to try go get to 20% of the value of the home to avoid paying PMI. If you DO pay PMI because you can't get to the 20%, remember that you can always either refinance to add more cash, or get the house re-appraised after a while to establish that the THEN-existing balance on the loan is <20% of the value of the house, at which time you tell your mortgage company and PMI should be able to stop.

The critical piece here is that you must TELL your mortgage company. They won't figure it out for you. There's no nice note that says "oh, you don't need PMI anymore" that they will send. You need to manage that on your own.
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