The fund has an initial minimum investment of $3,000; additional investments are $100. We plan to fully fund her Roth IRA ($4,000 in 2007) , as well as open and fully fund a Roth IRA for me.
I really enjoy searching the web for high quality financial websites that I can learn from. It’s amazing how much information is available online. Below is a list of sites that I visit frequently.
Early Retirement Forum
Finding this site started it all for me
2million
My favorite personal finance blog
Morningstar
More finance information that you can ever read
Bloomberg Calculators
Many useful financial calculators
Vanguard
Offers a wealth of resources and low expense Roth IRA choices
Other than my family, I only have a couple of friends that I talk with about money. Even then, our conversations are usually limited to vague references, and not actual numbers. I can see pros and cons to keeping money matters private.
Pros
Cons
As you can see, I can argue both sides, however, I lean more towards wanting to talk about money – this blog, although anonymous, is a great example.
One exception for me when it comes to talking about money is discussing compensation with co-workers. I don’t do it and wouldn’t recommend it.
.jpg)
We currently have $12,688.05 invested in my company’s 401(k) plan and $630.00 saved up to begin funding Roth IRA’s for my wife (minimum required to open a Vanguard Roth IRA is $3,000).
The 401(k) money was accumulated (no company match) over the past 5 years of off and on investing without a plan or a goal. Now that we do have a plan and a goal, we have decided to focus on fully funding our Roth IRA’s this year, while still contributing a small amount (2% of my salary) to my company’s 401(k) plan. The Roth IRA money will be invested in the Vanguard 500 Index Fund.
The main reasons we choose to focus on the Roth IRA’s are:
Since Roth IRA contributions are limited to $4,000 in 2007 (increases to $5K in 2008) we will be investing a total of $8,000 for my wife and I this year.
Live below your means
I believe this is one of the most important steps to a strong financial foundation and, for me, one of the hardest. If you try to keep up with your rich looking friends and associates, you may end up like most of them: lots of nice stuff, but a low net worth. Every dollar that you save is worth more than an extra dollar earned because the extra dollar earned is taxed.
Start an emergency fund
Job loss, health issues, and expenisve repairs are financial blows that can affect us all. Open a high yeild savings account (Emigrant Direct, ING, etc.) and start saving for the unexpected.
Aviod credit card debt
Credit card debt is the path to financial ruin. Been there, done that. Believe me when I tell you that digging the hole is very, very easy and climbing out is often a long, hard fought battle. The only thing we use credit cards for now are monthly bills because we get cash back from our Citi credit card. Don’t do this if can’t pay off the balance in full each month.
Track spending / create a budget
It’s easy to overspend if you don’t know what you’re spending. Track spending for a few months and use this information to create a budget. The budget will help keep you on track and hopefully help you find areas where you can reduce spending.
Learn all you can about investing
Most financial planners are more interested in their commission, rather than what is in your best interest. If you educate yourself, you can save A LOT of money and probably do just as good a job, if not better.
Invest at least 10% of your gross income
The future is coming whether you want it to our not. The magic of compound interest can make your consistent contributions grow into a large nest egg. Take advantage of tax sheltered retirement account such as a 401(k) and/or Roth IRA. If your employer offers a 401(k) with a company match, take advantage of the free money.
My wife and I have been putting investing on the backburner while we paid off some debt this past year. We feel that we’re in a position now to begin investing again.
We currently have $12,242 invested aggressively in my 401(k), broken down as such:
25% – JH Lifestyle Aggressive (1.15% expense ratio)
25% – Pacific Rim Fund (1.72% expense ratio)
25% – Real Est. Securities Fund (1.54% expense ratio)
25% – Natural Resources Fund (1.51% expense ratio)
We also have $700 in ADVENTRX Pharmaceuticals stock.
We’re choosing to focus on fully funding Roth IRA’s thru Vanguard, mainly because my company’s 401(k) plan has high expense ratios and no company match. That being said, we’ll still be contributing 2% to my 401(k) plan beginning mid next month.
Roughly $630/month (more some months) will be deposited into our Emigrant Direct savings account until we have the $3,000 minimum required to open a Vanguard 500 Index Fund. The Vanguard 500 Index Fund closely approximates the S&P500 which represents 70% of all U.S. publicly traded companies, and is considered the benchmark for U.S. equity performance.
We’re shooting to invest 10% of our gross income for the year because we need to build up an emergency fund and want to pay down some additional debt. Next year, we should be able to increase our investing.
