Can you recommend a financial book for my situation?

[Anonymous]

We are in late thirties and have one child (FTC for another). We got a late start financially but here is our current situation.

- No debt except mortgage
- 225k per yr income
- spend about 8k a month and this includes all fun stuff including travel
- have about 150k on 401k. We are contributing the max
- have about 250k sitting in money market funds
- no other money
- when we have another child, I don't see expenses (of course barring special circumstances), to go up significantly, other than daycare. We can do a lot of belt tightening if need be

We don't know anything about investing and want to learn a bit. Please recommed a book or given the numbers here, give me some suggestions as to what to consider. Thank you.

[Anonymous]

To begin with:

Personal Finance for Dummies, or Investing for Dummies

and

Read the wiki at Bogleheads.org (http://www.bogleheads.org/wiki/Main_Page)

My personal advice would be to keep doing what you're doing, plus (1) invest the max in IRAs, (2) invest some in a 529 plan for your state, (3) shift all but $50k of any leftover money market money into Vanguard Total Stock Market Index Fund. There could be other more complex tweaks, but those are the biggies. Oh, and make sure you have current wills set up.

[Anonymous]

Anonymous wrote:We are in late thirties and have one child (FTC for another). We got a late start financially but here is our current situation.

- No debt except mortgage
- 225k per yr income
- spend about 8k a month and this includes all fun stuff including travel
- have about 150k on 401k. We are contributing the max
- have about 250k sitting in money market funds
- no other money
- when we have another child, I don't see expenses (of course barring special circumstances), to go up significantly, other than daycare. We can do a lot of belt tightening if need be

We don't know anything about investing and want to learn a bit. Please recommed a book or given the numbers here, give me some suggestions as to what to consider. Thank you.

How much life insurance do you have?

[Anonymous]

I highly recommend the Money 101 series at CNN's personal finance/money website. http://money.cnn.com/magazines/moneymag/money101/

After that, I would probably consider bogleheads. There are also some decent all in one books, like Jane Bryant Quinn's. As PP points out, it's not just how much to save (or even asset allocation among savings) it's also life insurance, disabiltiy insurance etc.

That said, the first easy things I'd do is start shifting some of the money market funds into I-bonds-- there's a limit of 10k pp per year so I'd say it's worth rolling some over gradually.

[Anonymous]

Thank you PPs for answering. DH has a life insurance of 300k and I have 250k, and mine is paid by employer so I think if I kick the bucket one day after switching jobs, my family won't get anything.

We also pay 500 per month extra on the mortgage (included in the 8k/month number I gave earlier).

[Anonymous]

Anonymous wrote:Thank you PPs for answering. DH has a life insurance of 300k and I have 250k, and mine is paid by employer so I think if I kick the bucket one day after switching jobs, my family won't get anything.

We also pay 500 per month extra on the mortgage (included in the 8k/month number I gave earlier).

If you are healthy, you (and your spouse) might consider getting up to $1 million of your own insurance-- not dependent on your insurer. Term life is not very expensive.

[Anonymous]

#1 OP: get more insurance. That is not enough, and, life insurance is the base for serious financial planning.
2) Read - yes, I know, you asked here, but do more leg work on your own. You cannot have too much info.
3) The $$$ in your money market funds are essentially earning zero - move it elsewhere.
4) make sure you have a will in place - also, if there is a sudden demise of you and spouse, who gets the kid?
5) Too much of any single thing is too much - simply diversify your money somewhat between both investment sectors and advisors.

[Anonymous]

I agree you are under-insured. Get some term life. 20 year, 1 million should do.

I would pay off the mortgage with half of your money market stash, it is a guaranteed return of your interest rate less tax benefits. Nowadays you will find it hard to match that rate of return with any safe investments.

I would put half of the rest into vanguard or equivalent tracker funds.

[Anonymous]

If you are considering having another kid, I'd probably go for 25 or 30 year term-- that way you presumably are covered until the youngest is out of college.

I would be careful about how much you put into your mortgage because that money is not liquid, but you might consider refinancing to a 15 year mortgage or something.

[Anonymous]

To answer OP actual question.

http://www.amazon.com/One-Up-Wall-Street-Already/dp/0743200403

Great book.

[Anonymous]

Investment Biker by Jim Rogers

[Anonymous]

Anonymous wrote:To begin with:

Personal Finance for Dummies, or Investing for Dummies

and

Read the wiki at Bogleheads.org (http://www.bogleheads.org/wiki/Main_Page)

My personal advice would be to keep doing what you're doing, plus (1) invest the max in IRAs, (2) invest some in a 529 plan for your state, (3) shift all but $50k of any leftover money market money into Vanguard Total Stock Market Index Fund. There could be other more complex tweaks, but those are the biggies. Oh, and make sure you have current wills set up.

Agree with the Personal Finance for Dummies suggestion--we read it in our late 20s and it really helped set us on a good path in terms of making good financial decisions.

[Anonymous]

A Random Walk Down Wall Street by Burton Malkiel.

[Anonymous]

Suzy Orman is fantastic for you.

http://www.suzeorman.com/

[Anonymous]

Not OP, but can someone explain to me the reason that getting a $1 million policy is necessary. We have a similar financial situation (though lower income, our investment sizes are similar) and if something happened to one of us, I feel that there woudl be plenty of assets to rely on, if we had to. Our current policies (about $250k each) are already kind of expensive.