Emergency funds aren't there to pay huge returns; they're in place to be available when you need them, should an emergency arise. Say your washer dies, or your fridge...you don't want that money tied up. Funds that are expected to draw a decent rate of return are NOT your emergency fund. You don't want to "unplug" your investment money if your transmission goes out; that's what the SEPARATE emergency fund is for.
Now, if you have an actual year's worth of expenses sitting in your emergency fund, you're set...on that end. THEN your extra money goes toward either reducing/eliminating debt or building your SEPARATE investment account(s).
As far as debt goes...are you down to ONLY the mortgage? If not, GET THERE FIRST. If you have other, higher-interest debt, you're effectively taking that monthly payment AWAY from what you have available to invest. So you're costing yourself the interest on the debt, PLUS the rate of return the investment WOULD'VE made you...which makes that debt VERY expensive. Once THAT debt's paid off, and all you owe is your mortgage, apply what your other debt WAS to your mortgage principal and watch that sucker disappear.
When you're completely debt free, no one can take your home or possessions away from you. And you can live your life the way YOU choose.
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Today's Featured Article - Grain Threshing in the Early 40's - by Pat Browning. The setting is rural Wisconsin, halfway between East Troy and Elkhorn, on Hodunk Road, our nation was at war, and I was 6, 7 and 8 years old. George was our "threshing neighbor." He was the one with the threshing machine, a JI Case on steel wheels, and he pulled it to our farm with a JI Case standard tractor also on steel. In those days, steel wheeled implements were common. The roads were general gravel, so the lugs cutting into them wasn't a problem. George would set up the thresher, s
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