I've been batting this around for a while now. This might ramble a little. Bear with me. I'm wondering if anyone can poke holes in them.

As matching 401(k) contributions by my company are "free money" I am putting the maximum amount in. I am also paying off my credit cards as rapidly as possible. I keep the maximum 401(k) contribution because I know that I'm getting a 100% return on that money, which is better than the negative drain of the credit card APR. 

When I have finally paid them all off (about three years), I have to do something with the money I will have freed up. I want to invest it, but I don't want to invest it through a 401(k) or something similar. As the saying goes, "the broker gets paid when you make money. And when you lose money." 

What sorts of investments should I be reading up on in the intervening three years? I'm a cautious investor. I never would have bought a 2 bedroom house in a suburb for $600,000 as part of a flipping scheme because I understand what a pyramid scheme is. Nor am I one of the devotees of the "I bought this rundown house, put $70,000 of work into in, and made a $10,000 profit when I finally sold it. Only busted two fingers." Land sounds like a sensible thing to invest in (not something bought off eBay in the foothills of North Dakota -- 20 acres that can only be reached by helicopter), but again, I could use some preliminary advice, like the title of a few books. Individual purchase of stock also sounds promising (I think it's called Direct Investment, you buy the stock with a minimal fee and hang on to it for however long).

Basically, I understand that putting money in a glass jar and burying it in a backyard is the worst thing to do because the money loses buying power ($25 from 10 years ago does not buy $25 of stuff today). But I've gotten so fed up with reading these stories about how the CEOs who wiped out their companies and the hedge fund managers who wiped out investors' portfolios are still making millions, that I want as little as possible to do with that. If I'm going to end up eating cat food 25 years from now, at least let it be by my own doing, rather than as the victim of some slicksters who I can never get punished.

 Let me say Hello and Welcome.  

I can't help much with investments as I never understood any of it, beyond a basic savings account. But why I am answering, is that, IMO, the best peace of mind that one can have is owning your own home, no debt, and some rock solid savings accounts that you can't lose when the economy tanks. If you have enough in savings that will cover a year or two of monthly expenses, including the cost of a car, then and only then, should anyone take the risk of investments with what you have left of disposable income. I don't agree with those with the idea that one looks at their home as an investment and that one plans on it having an X value at some time in the future when it is sold, and then one would be able to live off of the profit. A home is a shelter, a sanctuary, a haven, a refuge, and as such should not be considered for profit taking. If profit happens when sold, all well and good, but otherwise it should remain outside of the realm of investments. 

As for burying the money in the backyard, maybe it won't have increased in value, but you will still have that money.  If you had invested it in something that then lost value including your initial investment, you would have nothing. 

I'm probably sounding too simplistic, but my Dh and I felt quite a bit of relief knowing that our house was paid for, our cars were paid for and almost all of our debt was gone, because we are living on a fixed income, and have been able to weather this financial debacle without problems. 

I wish you the best and hope you find the answers you are looking for. 

Edey

Some ideas on relatively safe, stable investments are TIPS  (Government inflation-protected bonds), bond mutual funds, etc. If you're interested in a bond mutual fund, you probably want an index fund (one that follows an index). The fees are generally lower on index funds.

Jill

What is your APR on credit cards? Paying off high interest debt is the best investment you can make. Right now your investments are at best yielding around 5%, your credit card is probably taking at least 10%. 10% is a pretty sweet return. Pay off the debt!!!, it is like earning the 10%. Are you following this? I would suggest buying low cost, no load index mutual funds in the future. One of the best online communities (well respected) for this type of no-brainer type of investing is: http://www.bogleheads.org/wiki/Main_Page You will find library sources there, great discussions and reading lists. They will even help you review your current 401K portfolio. Bogleheads is named in honor of Mr. Jack Bogle founder of Vanguard Mutual funds. Mr. Bogle is a true champion for the small investor.

A friend of mine is a retired stock broker, and she has done well with her investments even in this recession. When people ask her for stock-buying advice, she generally tells them to stick with oldies but goodies. She owns stocks like Nestle, Coca-Cola, Wal-Mart, McDonald's, etc. The reason for this is twofold:

1. Name recognition. People are more likely to buy goods from brands they know and recognize, which boosts the companies' profits (and your dividends).

2. "Classic companies" have weathered a recession (or two, or three). They have the muscles to get through the tough times. Based on their past performances, you can trust they'll get through this "market correction" too.

I think you are referring to a stock-buying program called Dividend Reinvestment Program, sometimes referred to as a DRIP program. Google it and see what other info you might find useful. Many companies participate in DRIP programs, but you have to contact each company individually for how to get started.

can't bury money in the ground or sew in in the mattress thing I  have so called done something like that in the past 401k is something to rethink I sujest a fin. person or a person who knows what they are doing with money to help out with this 401k thing things are kinda risky on that mine went to pot years ago and never recovered money wise in that department  but if you finace it the way you are saying it sounds like ok but when living off the interest from the house and paying tax I don't know what percent tax it is in your state if you live like we do very wise not blowing extra then good but get tighter 24.00 is like the 3.00 now don't leave much at all and the 3.00 will be the 0.00 in two yeats or less budget and go strict and last but not least welcome to this end of the jungle grab a chair suck coffee or tee soda or water or what ever turns your crank and have a really good read on the fourm welcome again...

cindy