Tag Archives: investing

Taxable Portfolio Update: $267,538

As my portfolio increases, I’ve stopped paying enough attention to how it’s actually performing. My current taxable portfolio ($267.5k) is detailed below. I have about the same amount in my retirement portfolio, which I’ll cover in another post.

Note, a few stocks are listed twice because I’ve purchased them in two different accounts.  My taxable stock accounts include FolioFirst (formerly Loyal3), Robinhood, Sharebuilder and Vanguard. Continue reading

Are 401k Accounts a Scam?

I’m no financial expert, but I try to follow the basic principles of investing and retirement savings in order to hopefully not be dirt poor in old age. One of these principles has been to consistently max out my 401(k) each year, which I’ve done faithfully now for many years, ever since I finally had access to a retirement account at work. As soon as as started making too much money for a Roth IRA, I socked away $18k a year in my 401k… and now, between all my pre- and post-tax retirement accounts, I have about $235k locked away, compounding over time.

However, after reading more propaganda on 401k investing, I started to suspect something fishy is up. Most of the anti 401k content focuses on issues with high fees — which, indeed, are a big problem with 401ks. But, really, the most suspicious piece of messaging out there on the benefits of the 401k is that you don’t have to pay taxes now so you get the “benefit” of paying them later. Continue reading

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How to Become an Accredited Investor

There are many benefits to being an “accredited investor,” primarily centered around being able to invest in securities not registered with financial authorities. In other words, the government blocks non-wealthy folks from making “high risk / high reward” investments. Is this fair? Shouldn’t I be allowed to invest my money in any investment if I earned that money?

While investments open only to accredited investors are high risk, there are many other investment types open to any income level which are extremely high risk. Even investing in one individual public stock – which anyone can do – is nearly the equivalent of putting all of one’s money on red in Vegas. Continue reading

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Current Investment Portfolio ($323k)

Some of you have emailed asking, so here is an overview of my current portfolio:

STOCKS – now @ $144,385 (2016 goal = $200k … which may be a stretch!)

  • $18402 – AAPL
  • $8665 – AMZN
  • $1891 – DIS
  • $1130 – FTR
  • $2783 – GE
  • $649 – GOOG
  • $20408 – IHI
  • $7315 – JNJ
  • $7862 – MCD
  • $6951 – SBUX
  • $2935 – VOO
  • $8178 – VZ
  • $33392 – VGHCX
  • $13690 – VMGMX
  • $5634 – Loyal3 Account (multi-stock)
  • $4500 – Robinhood Account (multi-stock)

RETIREMENT (mostly pre-tax) – now @ ~ $154,824 (2016 goal = $190k)

  • $9172 – DVY
  • $1487 – GLD
  • $2898 – XRT
  • $3088 – AMZN
  • $2199 – GOOGL
  • $2299 – NFLX
  • $347 – TEL
  • $2106 – VTI
  • $4658 – VFWIX
  • $12867 – VEMAX
  • $21943 – VIGAX
  • $16169 – VTIAX
  • $31170 – VTSAX
  • $12612 – VDADX
  • $5078 – VDIGX
  • $10928 – VSGAX
  • $15803 – 401k to rollover

OTHER ($24,164)

  • $6464 – 529 plan
  • $873 – Prosper
  • $427 – Lending Club
  • $16.4k – stock options that will likely be worth $0 in 2016

How I Increased My Networth 13% in 2015

Last year I increased by net worth from $309,894 in January of 2015 to $352,066 in January of 2016 (increase of $42,112 or 13% YoY increase.) This is not accounting for the last week of declines, which may or may not hinder 2016 growth. With a total net worth of $352k to start this year, I’m focused on my goal of hitting $400k by the end of 2016. Although this isn’t my original goal of $500k by the end of 2016, I think $400k is still a very aggressive and challenging goal for this year.

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In 2015, my stock portfolio increased from $144k to $171k. My retirement portfolio increased from $152k to $171k. Thus, the year concluded with approximately $342k in active investments (mostly stocks.) This is why when the market dips my portfolio significantly decreases. Since I have a substantial amount of funds in the stock market I tend to wait now a bit before putting large sums into play beyond what is already invested.

Goals for 2016:

Stocks: $200k, including $15k additional in Vanguard admiral healthcare fund, which has a $50k minimum. This would = $29k in net new investment, or ~$2.5k per month. If the market drops lower than monthly investments will have to increase to make up the difference.

  • $1250 / month — Vanguard Healthcare Fund (to get to $50k admiral minimum)
  • $400 / month — loyal3 fee-free partial stock investing
  • $850 / month — Vanguard fund TBD to get to $10k admiral (might reinvest in the dividend growth fund I sold for losses after a month or so. We’ll see.)

Retirement: $190k (max out 401k and IRA for 2016 — $23.5k additional investment, or $2k per month)

  • $18k = 401k max
  • $5.5k = vanguard IRA (post tax)

Cash: $10k – I’d like to close out the year with a $10k emergency fund.

This = a total monthly investment of approximately $4.5k per month, up to $6.5k if the market drops further. $6.5k is fairly impossible w/ my general monthly expenses plus the wedding, so I think the $4.5k goal (esp with some of it in pre-tax dollars) is a reasonable objective. If the market sucks this year then I probably won’t get to $400k, but I’ll still be buying discount stocks which will hopefully go up at some point in the next 10 years to make up for any losses.

If I can do this then and maintain my job I should be able to close the year out with $400k net worth. This would be a very exciting achievement for this year, as I’d still be on target to hit $500k prior to 35 (2018.)

Fun with Tax Loss Harvesting When the Stock Market Goes South

What’s a girl to do when her short term and long term “gains” are actually bright red losses?

Sell! Sell! Sell!

Now, before you berate me for selling when the market is down, let me explain, I am not selling to get out of the market.

My Vanguard shares were down significantly enough that I wanted to take action. Investing in index funds, I don’t have a strong opinion on one or the other. I had a dividend appreciation fund and a small-cap fund that today were mutually down about $500. That’s a $500 loss I can take against any gains made this year. I could wait for it to go down even more (it probably will) or, I could just pull out the money now and plop it straight into another “different” investment to reap the potential gains (or further losses) of being in the stock market this year.

I pulled out a good $23k from these two investments, and moved them into my Vanguard Healthcare fund which I’m slowly but surely plugging away at the $50k minimum for the Admiral version (I love me a good low-fee admiral fund.) So now my healthcare fund is at about $34k and I’ll have $500 in losses to write off come tax time next year. Not so shabby.

Note I’m not a tax professional and I don’t actually know what I’m doing, so get some real advice before you take any of mine. 🙂

How to Give Financial Advice to People Who Ask But Won’t Listen

Recently a friend of mine from childhood, who now lives in a different part of the state, was in town on a road trip and stopped to have dinner with me. While we grew up in the same middle class neighborhood, her family was definitely more “middle class” versus mine which was “upper middle class.” So when she asked me for some financial advice due to a potential windfall from a recent family death, I paused before sharing my typical spiel.

Said friend currently owns property with a mortgage (her parents helped her with the downpayment), but otherwise lives paycheck to paycheck. She makes $60k a year and to her that’s a lot (I did not mention that my income is north of $150k right now, but that’s neither here nor there because that’s a short-lived situation anyway.) She mentioned that she was considering investing in Primerica Financial Services, which I hadn’t heard of before, but sounded a bit like a god-awful pyramid scheme. She acknowledged that it sort of a pyramid scheme, but she was interested in it anyway. If you tell me that and ask for financial advice, I’m going to give it to you.

My advice was fairly simple. I asked her if she had any retirement savings and she said yes, she had invested in 401ks at other jobs before, up to the match (great) but then went on to tell me that she had no idea where any of these accounts were. “Is there one 401k account somewhere that I can just call up?” She asked. I tried to explain to her that she should call her old employers, locate where her accounts are, and ideally roll these over into a Vanguard IRA. In the meantime, if she were to get the small windfall, to invest this in a Roth IRA in order to continue saving for retirement. She wanted access to the money sooner than that, so I recommended a taxable Vanguard STAR fund, but to consider putting it into a Roth anyway and forgetting it ever happened.

When she was asking me about stocks, it became apparent that she understood practically nothing about personal finance. It also became apparent to me that I’ve learned quite a bit in the last 10 years of my life since starting this blog – not enough to be a CFP but enough to hold my own in advising on basic money moves. I enjoyed providing advice and helping her, but I have a feeling she isn’t going to take a bit of my advice. Oh well. At least I tried.

February Wrap Up & Networth Update

February, despite being a short month, was quite a productive one financially. The stock market was going up and up and up, which provided quite a nice bump in my networth.

For the new readers:
My Objective: $500k in networth by 1/1/17, $400k by 1/1/16. First kid by 1/1/18.

Well, despite being in a bit of a funk/depression this February, my bank account looks quite healthy. So healthy, in fact, that according to my bi-monthy networth report, I’m actually ahead of plan. This is extremely exciting to me as this is the first year I’m attempting to see a $100k increase in my annual networth. Being as I hope for a more flexible career when I have children, I have only a few more years to achieve my goal. Including my material assets (namely my car), my networth is now somewhere between $327k and $337k. My goal for 3/1/15 was $316k to be on track to $400k this year.

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Now, not every month is going to be so great in terms of stock growth, and likely my portfolio will see a correction soon. It’s just fun how the more money you save the more it can go up in a month when the market is also going up. Also, I’m fortunate to have a job and lifestyle that enables me to save, save, save. Well, I did go shopping last month and bought a few new items, but overall I feel good about the month in total. Makes up for a fairly flat January.

My focus is really on being exceptional in my work so I can maintain this level of growth without flatlining or seeing a decline this year. This year can really go any which way. I’m hopeful I’ll continue to have good news next month, and be well ahead of plan by mid year.

 

Addicted to Loyal3 Investing

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My investing hobby started with a few hundred dollars of fun money after maxing out my Roth to invest in individual stocks and ETFs to better understand the stock market. This same Sharebuilder account is now worth $101k and is filled with dozens of stocks and funds. Selling them will be a tax nightmare. I plan to hold them for the long run and sell during a few frugal years in early retirement so they get fairly decent capital gains tax rates.

One thing that always bugged me about my Sharebuilder investments is the trading fees. They used to have a better system where you could pay $12 for 12 auto trades per month — $1 trades weren’t bad, but even with the $1 trades you had to pay $8 or so to trade each individual stock/fund out. Now Sharebuilder got rid of the auto-investing plan and made the cheapest auto trade be about $4. That’s not so bad, but it is bad when you consider the whole premise of Sharebuilder is to build your shares slowly – by investing a little bit at a time. When you really start doing the math you realize these fees are massively cutting into your prospective earnings over time. I often wondered – isn’t there a better way?

The good news is – now there is. Loyal3 (not getting paid for this promo, I genuinely am excited about this company) makes it possible for the average everyday investor to invest directly into companies whenever they want for 100% free trade in and out. The companies are footing the bill to help everyday investors buy their stock. While generally speaking investing in index funds is the best bet, if you’re going to be a hobbyist investor and want to pick up a few individuals stocks without getting jipped on fees, now you have a great resource to do so.

So I got a little carried away tonight and purchase 6 individual stocks. They are limited in what stocks are available – but it turns out about 50% of my existing sharebuilder purchases are available. Unfortunately they don’t allow transfers in (bummer) so I’d have to sell my current shares in order to buy them again and trigger a capital gain just to consolidate my shares, not worth it. But the good news is now instead of wasting $4 per transaction on buying more shares of companies from Coca Cola to McDonalds to Apple, I can just buy however much I want to buy at whatever time and never have to worry about fees again. At least for the companies available to buy… which, granted, is limited at this time, but I bet will grow in the future.

I’m also testing the water for some new investments — I stopped adding new individual stocks to my sharebuilder account because the list was getting ridiculous and I couldn’t justify all the diversification with fees cutting away at my gains… but now diversification is easy, fun, and free. My investments aren’t showing up yet (they take 3 days to transfer in) but tonight instead of splurging on a new pair of jeans I bought some stock for $10 here, $25 there. I’m impressed.

*Note if you are new to investing I still recommend buying Vanguard Index funds!!!