Monday, January 23, 2006

Vanguard IRA

After several hours of researching different options and looking at opinions voiced on other personal finance blogs, I have decided to open a Roth IRA account at Vanguard. I deposited $1,000. (the minimum for opening an account) Since I want to concentrate my investments in one account to shorten the time frame to reach the $5,000 fee waiver limit, I have decided to invest in the 2045 Target Retirement fund. This fund will allow me to have a little diversity and still have potential for reasonable gains. I also established an automatic investing plan where I will be contributing an additional $125 each month.

Wednesday, January 18, 2006

Roth IRA

Over the past several months I have been reading other personal finance blogs and many proclaim the benefits of the Roth IRA. The tax-free growth and the ability to withdraw contributions penalty free are just two such benefits. In the past, I was always comfortable simply allocating as much as I could afford to my 401k account. I have done some thinking and reading and now feel that is likely not the most tax effective strategy for someone my age and with my income. Going forward, I am going to continue to contribute 8% of my salary to my 401k; therefore insuring that I continue to receive the full company match. The extra 2% I was contributing to my 401k will now be invested in a Roth IRA. I will end up contributing the same amount towards my retirement in total just in a little different way. Since I currently do not have a Roth IRA established, I will be researching the various brokers, likely just Fidelity and Vanguard, and establishing an account at the one that is better suited for me.

Tuesday, January 17, 2006

Budgeting Woes

Tracking my spending has always been a task that I want to tackle but also one I constantly avoid. I have a general idea where most of our money goes and I know we rarely ever spend more than we make so maybe that is why it has never been much of a priority. However, in reading other personal finance blogs, I am beginning to realize that there is likely some "fat" in our spending that could be trimmed. I like nice starting points, so I will begin tracking our expenses on February 1st. That gives me two weeks to finalize a preliminary budget.

Monday, January 16, 2006

Goal Progress

Today, I thought I would share where I am at related to my goals and outline the steps I am taking to reach those goals.

Long-term Retirement Goal

I currently have a little over $30,000 saved for retirement. While it is a good start and appears to be above average for someone my age, it is still less than 2% of my retirement goal. I currently allocate 10% of each paycheck to my company 401k plan and my employer contributes 2.5%. The company match is structured that they match 50% of my contribution up to 2% and then 25% of my contribution up to 8%. I have projected out that my 401k balance will reach my magical goal of $1.75 million when I am in my mid-fifties. The assumptions in my projection are 3% wage increases annually, 1% contribution increases annually and 8% return on investment. I am hoping that the first and third assumptions turn out to be conservative so that I can reach this goal a little sooner. Once my wife returns to the workforce (when the kids are old enough to go to school), we should be able to ramp up the retirement savings even more.

Sunday, January 15, 2006

Where to then?

Now that the introduction is out of the way, I will focus on sharing my financial goals. This post will cover my long-term financial goal. In future posts, I will share my mid-term and short-term goals.

I have read numerous personal finance blogs and unfortunately my long-term goal is not going to be much different. I am hoping to retire early (mid 50s) so that gives me roughly 25 years to accumulate enough to support my wife and I for 30 plus years of retirement (I hope). So what kind of number am I shooting be totally honest I do not know. The calculator on Money Chimp gave me a number around the $1.75 million range which is just mind boggling. Still, I am going to try and take the necessary steps to reach that goal.

What steps you might be asking? Well for starters, I am utilizing my company's 401k and hope to branch out into other investment vehicles such as the Roth IRA in the near future.

Saturday, January 14, 2006



This blog is my personal journey through the financial ups and downs of family life. I am a 28 year old accounting manager living in Washington state. I have a wonderful wife and two adorable children. My daughter is two going on twelve and my son is quickly approaching six months.

My hope is to post the financial happenings in my life and my journey down the road to prosperity.