>>The recent run up in the market has put me in a mind to move money around, but attempting to time the market has always proven to be a losing proposition for me!!! Every time I have tried to time the market, I have lost money.... if I would have just stayed put, I'd be much better off today. Exactly. You are following (what it sounds like to me, so apologies if this isn't correct) the "herd" mentality and buying when it is popular (high) and then panic selling when the market falls. It's no different than buying a house at the top of the RE runup and then watching the RE 'bubble' burst on you (yeah, it happened to us in 1989, so I know how it feels!). Steady, reasoned investing with a diversified portfolio - which you are NOT doing by having only 2 funds in mind - gives better results over time. You will not gain hugely in hot stock years, but you will also not lose hugely in bad ones, such as the 27% drop in the S&P 500 from 2000-2002 and the dot-com implosion. Our retirement portfolio was 85% invested in the S&P 500 in 2000. Lost my job in the dot-com implosion and watched my husband's retirement savings lose a quarter of their value. My husband asked me what we should do. I told him the fundamentals were still in our favor, we're investing for the long term, and that the big stocks would recover first which is the historical norm. Within 18 months we had regained the losses and the portfolio has gained 11-22% annually since, BUT we are currently more aggressively diversified into international stocks on the advice of my ex-boss. He's an independent Certified Financial Planner who can pick and choose his customers because he's semi-retired and only takes referrals, no hard advertising for years now. What I learned from him that was a lot more important than any stock tip was to get my legal and financial house in order! This meant a customized Revocable Trust (we learned what NOT to have while trying to update my widowed MIL's outdated Trust!), new wills, power of attorney docs, durable healthcare POA updates (including the crucial HIPAA release which nobody ever tells you about, but legally a doctor can't even tell your spouse what's wrong with you, emergency or no, without it). I also finally consolidated all my previous employer 401k's into one IRA at a low-cost brokerage. I'd been meaning to do it for years, but kept putting it off. I finally got a first-hand lesson just before I left the CFP's employ - a widow signed on as a new client and her husband had left half a dozen 401k's scattered around at various tech companies. It was a paperwork NIGHTMARE to get them consolidated under the widow's name! So that was on my to-do list before I could start looking for work, LOL. You cannot "time" the market. Free advice is usually worth what you have paid for it. Heck, even a lot of paid advice often isn't worth it! As my ex-boss would tell people, "Hey, if I knew what the next hot stock would be, do you think I'd still be doing the CFP thing??!??" Mind you, he makes a very comfortable living; nothing outrageous and nouveau riche, just a good solid six-figure income plus he loves what he does, working with people and helping them secure a good financial future. Set up a regular investment program and diversify through mutual funds at a low-cost brokerage. At least 3 funds in different markets, preferably 5 as your portfolio grows. Check the 10 yr average returns because the 5 yr averages are now skewed - the 'dog years' of 2000-2001 have now fallen off the 5 yr average. For those who are saving for college, 529 plans are not counted in most college aid plans because the adult retains ownership, a child is merely the beneficiary and it can be changed at any time. However, 529 plans are only useful if your investment horizon is at least 10-15 years. A UTMA account can be transferred to a 529 plan but you will need to talk to your financial advisor or brokerage for full details.

Wow! Thanks for all the additional feedback. You've given me even more to think about, although it all seems a little bit clearer now. whode, you are definitely right that putting the money into principal makes it less accessible. Though we are generally very disciplined, there is a high chance that we would dip into a more accessible savings account, or perhaps not be as disciplined about putting the money away in the first place. By setting our mortgage minimum (the real mortgage payment + our self imposed principal payment) we don't seem to waver much if ever. I have to think that whether we pay off the mortgage ASAP, build up savings, or do a little of both, we are still heading in the right direction. I have so many friends who discuss why you shouldn't pay off your mortgage, but then they don't/can't save any money on the side so they really aren't getting ahead on any level, are they? Thanks again. Q

devorah, yeah you have a point. That is always a possibility, but that's why we also have the emergency fund- it's a road I hope we don't have to take. At present he's in a job he doesn't love, but it is relatively secure. At our current payoff rate it will be just a few more years with a mortgage and then he will be free to take chances with other jobs that may not be as secure. I should also mention that in addition to prepaying the mortgage, we are continuing to save for retirement as well as for short term goals (new appliances, unforseen repairs, etc.) When the house is paid off, it will mean a substancial chunk of expendable income coming our way each month- even taking into consideration taxes, insurance, and additional monies that will be earmarked for retirement accounts. The way we looked at it was to struggle very hard for a few short years, and have the stress of a house payment removed rather than having larger demands of both mortgage and retirement hanging over our heads for 30 years. I should probably also mention that we are beyond the point where we are able to deduct the interest- so no tax break for us there to offset the amount of interest needed to break even. I don't expect others to fully understand the method to our madness- there are so many more facets to it beyond just that. It's a personal decision based on current circumstances, hopefully the right one for us. Now that I think about it, I've never heard someone say they were sorry they paid their house off early... Sorry to get so wordy- I've been sitting on hold with an insurance company for 30 minutes....

Hi Heidiho, Someone said on one of these credit card threads that there are some cards that allow you to make new purchases and charge 0% on that, but that some will charge interest right away, sometimes at a rather high rate, on new purchases - it's only 0% on the amount transferred. And they credit payments to the transferred amount, leaving the whole of the new purchased amount to attract interest. Better make sure you read all the fine print. It's best, of course, if you can avoid making any new purchases on the card(s) until your balances are paid off. Then pay off the balance every month. Hope you work things out to your advantage. joyful guy/Ed