Date: Sat, 17 Mar 2007 18:38:12 -0500
From: darkness39@yahoo.com
Newsgroups: misc.invest.financial-plan
Subject: Re: Help for a 40 year old....
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On Mar 17, 6:52 pm, black  wrote:
> OK...I admin that I am not a money wizard!! There I said it.
> I have ideas but can never seem to implement them.  Therefore, we have
> a good amount of money in the bank but its not earning us anything.


Mutual Funds for Dummies and Financial Planning for Dummies are both
helpful.

My general thoughts are:

- work out how much you need for expenses, etc.  It is normally
prudent to keep at least 6 months of living expenses (including
mortgage) in a 'cash' account (MM Funds, CDs etc.)

- make sure you have enough term life insurance and disability
insurance to cover you in situations of death or serious illness
(including benefits provided by your employer)

Assuming you have a normal retirement profile (ie seeking to retire
between 60 and 65, no special health or family issues) and you feel
you are making adequate college provisions for children etc. then

- subject to that, maximise your 401k contributions, at least to the
point of getting any company matching, investing, if possible, in a
low cost index fund.  Ideally, a low cost index fund and a low cost
international index fund (70-75% in the former, 25-30% in the latter).

You don't want to make investments in a lump sum, you want to make
investments steadily over time, on a month by month basis.

If there is a range of index funds on offer, what you want is the fund
that 1). matches or tracks the widest index possible (ie if possible
more than the Standard and Poors 500 index) and 2). has the lowest
possible fees and Total Expense Ratio.

- IRAs are a separate issue, as I am not an American based investor, I
leave that to others to consider

Remember paying down your mortgage is also an investment, and one
which gives a certain rate of return (the interest rate of your
mortgage, adjusted for the tax benefits and the tax you pay on
investment income).