What is the best thing to do with money?

[_Rambo]

If you had some extra money laying around what would you do with it. Let say you have a pretty stable job as well and you are able to take some risks. Anybody have some good articles or books to read. I have been thinking about buying another place and renting it out but I am not sure if that would be the best thing to do.

[_asbestosman]

I'm no financial guru, but from what I've read, it depends on how much risk you're willing to accept and how long you're willing to invest it. Paying off debt first can be a great strategy because it has a guaranteed return higher than other guaranteed returns. However, it's not that simple because you get tax benefits from paying interest and (at least before the crash), the expected return of the stock market (with a good index fund) was greater than the interest on a mortgage in the long run. I'm not sure if that still holds true today. Another "problem" with paying off mortgage early is that if your house drops in value enough you won't be able to "benefit" from bankruptcy. Walking away from a house may not be fair and I don't recommend it from an ethical standpoint, but it's legal and can save you money.

The other trick is to find as many ways as possible to keep the tax man's hands off your wealth. Sometimes setting up accounts in your children's names makes sense and sometimes it's actually counter-productive. The tax man is a tricky one.

[_Ezias]

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