Ask Paul: We paid off the house, where to invest now?

Q. My husband and I are both 46, self-employed and earning a gross wage of $43,000 each and have just finished paying off our house (valued at $850,000).

I have one Flexible Lifetime super account with AMP valued at $35,000 and another with Colonial Super Retirement Fund ($120,000); my husband has one Flexible Lifetime account with AMP ($107,000).

I also have 661 CBA shares with dividends reinvested and we have joint savings of $10,000.

We have three children: one who is 19 and has left home and a 17- and 13-year-old.

Now that we have paid off our home we are looking for the best way to invest our money.

We were thinking of a managed fund or something that would allow us to make regular deposits.

We do not live a lavish lifestyle and have always saved hard but have not gone without. Before our home was paid off we were making weekly deposits of $750 to it.

Are there any funds that you would recommend? - Sharon

A. It is such a big step when you pay off your home. Congratulations, Sharon, I am genuinely delighted for you.

Then your eldest leaves home, also a big step.

The first thing I would do is to combine your two super accounts into one. You are paying two sets of fees and quite possibly two lots of insurance.

Take a look at the performance of both your funds, then look at fees. If both are low fee, I'd go with the best long-term performer.

If both are high, I'd move them to a low-fee fund.

Next, I would add to super. Do check with your accountant, though, because as a self-employed person you may have various tax breaks that I am unaware of.

Finally, in the modern world there are many low-cost share funds, both listed on the sharemarket and unlisted.

I am sure Money will give you quite a few ideas but I am a bit of a fanatic about low fees, so managers like Vanguard or BlackRock, which have super low fees, do appeal to me. Take a bit of time to do some research.

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