Savings Story

My Current Investments

I don’t talk a lot about my investments. Why? I don’t really know all that much about investing. Remember, for the first 31 years of my life, I was broke and in debt. Now, I’m debt free, saving some money, and I’m learning as much as I can about investing. I am funding my 403b (at work), a Roth IRA for myself, a Roth IRA for my wife, and an ESA for my daughter. (If you ever want to know about my retirement and education savings, simply click the category labeled “$48,000“. $48,000 represents 60% of our combined gross income and is the total amount that I am trying to save and invest in 2007. All categories are all listed on the left-hand side of this page.) I have been contributing to my 403b for the past ten years, but the annual amounts that I contributed were very, very small (usually less than $1000). Now, I am aggressively funding my 403b and my other accounts. Here’s a breakdown of my current investments.


30% REIT, 40% Small Cap Growth, 30% International Growth

–My 403b funds are aggressively invested. I know this, I acknowledge this, and I am FINE with this. Why? My wife’s job provides her with a pension fund and will be our “safety” net. I have decided to be aggressive with my 403b in an effort to maximize my returns. (NCN “personal prediction sure to be wrong”: I think that the areas for growth in the next 5 years will be in international stocks and small cap stocks. I’m probably wrong, but this is what I “think”. Please note, I would NEVER, EVER suggest that ANYONE mistake my prediction for advice. The FASTEST way for you to go broke is to listen to what I have to say about investing! If you are looking for blogs by people who KNOW what they are talking about when they talk about investing, check out some of my personal finance blogging pals: Five Cent Nickel, My Money Blog, All Financial Matters, and Free Money Finance. Getting out of debt or trying to save for emergencies? I’m your man. Learning how to invest? Read those other blogs!)

My Roth / My Wife’s Roth

100% in RFG, an ETF which tracks the growth stocks in the S&P Mid-cap 400.

–I do not practice “dollar-cost-averaging”. I save up an entire year’s worth of contributions, send a check for that amount ($4000 for 2006) to my brokerage and then purchase a single ETF. Again, this ETF is more aggressive than an ETF which tracked the total market or the S&P 500. I use ETF’s (instead of mutual funds) because I like to make ONE purchase per year.

Daughter’s ESA

90% in RSP, a weighted ETF which tracks the S&P500 Equal Weight Index. 10% in CLX, my only single-stock investment.

–RSP in an interesting ETF. It is an “equal-weight” ETF. What does that mean? Most ETF’s invest in a multitude of stocks, and the amount of stocks owned PER company is determined by company SIZE. An “equal-weight” ETF (at least I ‘think’ this is right) purchases all of the stocks in an Index, but purchases the same amount of stocks PER company, regardless of company size. Benefits of this approach include the fact that the smaller, faster-growing companies in an index make more of an impact on an ETF’s price. As for CLX (Clorox), I just wanted to own a solid, dividend paying company. I purchased this stock two years ago when I opened my daughter’s ESA and I’ve just continued to hold onto it. The percentage of my portfolio dedicated to CLX stock will decrease as I make additional contributions to the ESA, but I plan to simply hold the stocks that I already own.

Again, please do not “copy or emulate” my investing strategies. I am in the very, very early stages of learning about investing. I’m POSITIVE that there are TONS of blogs, sites, and television shows from which you can get good, solid, dependable, investing advice. No Credit Needed is NOT an advice site! I just share with your WHAT I AM DOING!

The final breakdown looks like this:

Small Cap, REIT, International, Mid-Cap, Large-Cap, Single Stock.

(By the way, here’s how my retirement account performed in 2006.)

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