Pay off your debts first ie credit cards in full every month. investments should make MORE than the interest rate you are paying on a house. Only pay off the house first if you are super conservative. I guess you are since you are doing 500 index fund. Solid plan. Personally I prefer a more aggressive stance - but to each his own. Not sure i get the vacation home thing but if you get a good deal and can sell it later for more, that's a win. Real Estate appears to be peaking right now. Bought my house @ 2007 as a foreclosure so made out well there too. Play your cards right and your plan can work out.