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Old 10-17-2007, 04:51 PM   #21
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I do both. I have a number of automated investments such as 401k and a taxable account, and I also make lump sum investments periodically.
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Old 10-17-2007, 04:57 PM   #22
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Quote:
Originally Posted by ChemEng View Post
I was listening to Howard Stern yesterday, and he was talking about his 'savings program' when he was younger. The program was simple: With every paycheck, he would purchase a Bond. Its a lesson he said he learned from his father early in life. I didnt get those lessons from my parents and am playing catchup much later.

At any rate, I realized that I dont really have a formalized program like that. My TSP and Roth are automated with every paycheck, but I dont have a program for aftertax investments. Right now its just paying down on debt.

So Im curious what program people use? Is it set up automatically or do you have to manually do the transfer? Any recommendations or advice on areas to look into or avoid?
You already have automated TSP and Roth IRA plus you pay down mortgage. That sounds good assuming you are maxed out on TSP and Roth.

If you still have excess to save you could consider savings to Vanguard Tax-exempt Muni Money Market and/or Vanguard tax-exempt intermediate term muni funds. I think you can arrange auto deposit into them from your checking account.
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Old 10-17-2007, 07:10 PM   #23
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Used to was a fair bit of cash went through my hands - it was cheaper to pay in cash than to have a checking account (remember when checking accounts cost money?). Back then, and now, i would make a point of converting to $100 bills - had a serious problem breaking a hundred for some piddling thing. Paperclipped the hundreds and had an even harder time breaking a $1000 stack. Now and again would take stacks of hundreds in and pay down the principal on various property loans. Figured that saving the interest on the property loans was about the best guaranteed investment i could make.
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Old 10-17-2007, 07:30 PM   #24
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Follow on question: Do you invest the yearly max into your Roth as soon as its allowed? Or the yearly max divided by the number of paychecks?

Im currently doing the latter, but have considered the former. I decided against it ultimately, but would like to know your thoughts if you choose differently.
Well, it would be smarter to put it in gradually (DCA), but I don't. I put the whole $5000 ($4000 plus $1000 over-50 catchup) in all at once. The reason I do that is that most Vanguard funds require at least $3000 minimum to start, and I like being able to buy a different fund every year.

My Roth is only 11 months old, so I just have $11,300 in it so far (in Vanguard Windsor VWNDX and Vanguard European Index VEURX). I can put another $5500 or so in it in January, so maybe I'll get a small cap index fund or total stock market index fund or something. Since it is so small, my Roth is like my sandbox for playing with investing, and I have fun with it.
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Old 10-17-2007, 08:01 PM   #25
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I auto. do the max in 401k type plan....already invested my roth contribution for the year and periodically add to my taxable investments when I see value...I think that I have already hit my taxable investment goal for the year, though...
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Old 10-17-2007, 09:03 PM   #26
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Every time I run over a squirrel, I hang it up to dry in the shed and then salt it. I figure that some day I will have enough salted away to feed the family without working for the county.
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Old 10-17-2007, 09:39 PM   #27
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Quote:
Originally Posted by ChemEng View Post
Follow on question: Do you invest the yearly max into your Roth as soon as its allowed? Or the yearly max divided by the number of paychecks?
I've maxed my Roth every year mostly by DCA'ing monthly, plus throwing in small lumps here and there whenever spare change was available. I just dumped in another $2800 yesterday, and will top off the full $5k with a few more DCA deposits.

I'm sad because this is the last year for funding my Roth.....because of ER.
I'm glad because this is the last year for funding my Roth....because of ER.
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Old 10-17-2007, 10:11 PM   #28
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I have 20% of my paycheck diverted to my 401(k), and the balance is deposited into my checking account.

As cash accumulates in my checking account above and beyond expenses, it gets moved to high-yield savings (currently IndyMac Bank and AmTrust Direct) -- basically my emergency fund.

As soon as possible each year I fund to the max in the following order:

1. Roth IRA
2. 529 plan
3. ESA for oldest child
4. ESA for middle child
5. ESA for youngest child.

I do lump sums just because it's easier and has historically beat monthly DCA by a smidge.

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Old 10-18-2007, 12:51 AM   #29
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My wife contributes 13% of each paycheck to her 401K automatically. I contribute automatically $333 to my IRA every month. My wife and I get paid every two weeks.
In addition, $1450 is transferred once a month automatically to the money market fund in our taxable account at VG. The day following the transfer, and using a spreadsheet I created in Excel to determine the proper amounts, I manually exchange the new contribution from the money market fund to a variety of mutual funds. The funds that have performed most poorly in the past month receive more money, those that have performed best receive less so that I can bring my asset allocation back to where I want it to be.
Money left in the bank at the end of the month is used to top off the EF if needed or else it is added to the taxable account.
That's what our savings program looks like.
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Old 10-18-2007, 09:13 AM   #30
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During college planning phase for children:

Automated: US Savings Bonds & 529 Plan; Utility Company Drip; CSRS; 401k; TSP; SEP-IRA.

After college planning phase:

Automated: CSRS; TSP; 401k; SEP-IRA; Money Market Fund.
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Old 10-19-2007, 09:21 AM   #31
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Originally Posted by Achiever51 View Post
Gawd, I cannot believe I have ANYTHING in common with Howard Stern, but it appears I do: beginning at the age of 16 in my very first job, I bought a US Savings Bond every month for the next 39 years until I retired last December. In the beginning it was a $50 bond but as I made more $$, I bought larger denominations. Haven't redeemed any of the nearly 500 bonds I've accumulated, some are drawing 6%, and while I probably could have made more over time in another investment, for me it was a painless way to save.

WARNING*****WASTE ALERT****

Achiever51 - while that is an amazingly laudable act, please be aware that some of your bonds ARE NO LONGER EARNING INTEREST! Your moolah is sitting in the bond, and not only is it not growing, YOU ARE LOOSING MONEY DUE TO INFLATION!

That, and some of your bonds are earning only 3%-4% interest.
Check out their current yields here:
Individual - Savings Bond Earnings Reports
You'd be better off using your current marginal tax bracket to cash some in that aren't earning interest anymore and throwing them into a MM account or CD.
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Old 10-19-2007, 09:05 PM   #32
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WARNING*****WASTE ALERT****

Achiever51 - while that is an amazingly laudable act, please be aware that some of your bonds ARE NO LONGER EARNING INTEREST! Your moolah is sitting in the bond, and not only is it not growing, YOU ARE LOOSING MONEY DUE TO INFLATION!

That, and some of your bonds are earning only 3%-4% interest.
Check out their current yields here:
Individual - Savings Bond Earnings Reports
You'd be better off using your current marginal tax bracket to cash some in that aren't earning interest anymore and throwing them into a MM account or CD.
Thanks for the alert. I do have all the bonds still earning interest in my portfolio, but I should have said that as opportunities presented themselves, I have "traded" in the ones approaching maturity/or those earning lower interest rates for other higher interest paying investments.
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Old 10-20-2007, 11:27 PM   #33
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Automated: 25% into my 401K; $200 into savings.
Also contribute $4K into my Roth IRA.
Excess money is put into my mutual funds during the year.
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Old 10-20-2007, 11:36 PM   #34
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200 extra monthly to mortgage AUTO
80 weekly to 5.4% amtrust savings AUTO
40 weekly to ING "gonna buy me a nice truck one day fund" AUTO
165 bi-weekly ROTH IRA AUTO
70 weekly SIMPLE IRA Trying to make AUTO,


all the $$ goes into checking. i keep a steady balance of $3k...give or take $1k. If I get up to 5k or so, I skim some off the top and send it to mm earning 5.5%

i DONT balance my checkbook the 'normal' way. i do it in my head, and review it regularly online. as long as I have $3k in there, i wont bounce any checks (i actually havent written a paper check in some time!) or auto-pymts for a month or so
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Old 10-24-2007, 10:54 PM   #35
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I set up three bank accounts. One for payroll to come in. One for expenses to go out. One for investments. On pay day, I transfer an amount of money to the expense account, and a (much larger) amount to the investment account.

The money in the expense account is barely enough to meet my expenses.
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Old 10-24-2007, 11:16 PM   #36
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My program:

#1 THOU SHALT NOT be a idiot consumer.

#2 THOU SHALT NOT have a spouse or children who are idiot consumers.

#3 THOU SHALT Save/Invest every Penny that thou dost not spend on bills
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Old 10-25-2007, 12:09 AM   #37
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Automatically every two weeks into my TSP account up to the max. Since I'll be 50 in January, my max will go from $!5,500 to $20,500 and somewhere, somehow I'll find the $$ to put in there. Actually, I think I read that the maxes for 401 type accounts were increasing another $500 for 2008, so I guess that'll be $21K.
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Old 10-25-2007, 06:07 AM   #38
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Automatically every two weeks into my TSP account up to the max. Since I'll be 50 in January, my max will go from $!5,500 to $20,500 and somewhere, somehow I'll find the $$ to put in there. Actually, I think I read that the maxes for 401 type accounts were increasing another $500 for 2008, so I guess that'll be $21K.
Here's what I read about that on the TSP website this morning:

"The elective deferral limit for 2008 is $15,500. The limit for 2007 was also $15,500. "

"The limit on catch-up contributions for 2008 is $5,000. It remains the same as the 2007 limit. "

TSP: Current Info, Data; 2007-10-24

I am surprised and not too happy about that, but it is what it is.
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Old 10-25-2007, 07:58 AM   #39
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I am surprised and not too happy about that, but it is what it is.
Well, sure. As we all know, inflation is well under control...
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Old 10-26-2007, 11:28 AM   #40
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Quote:
Originally Posted by ChemEng View Post
I was listening to Howard Stern yesterday, and he was talking about his 'savings program' when he was younger. The program was simple: With every paycheck, he would purchase a Bond. Its a lesson he said he learned from his father early in life. I didnt get those lessons from my parents and am playing catchup much later.

At any rate, I realized that I dont really have a formalized program like that. My TSP and Roth are automated with every paycheck, but I dont have a program for aftertax investments. Right now its just paying down on debt.

So Im curious what program people use? Is it set up automatically or do you have to manually do the transfer? Any recommendations or advice on areas to look into or avoid?
401k every paycheck for me (currently 11%, increasing 1% every June).
401k every paycheck for wife (6%, getting whole match)
Roth for me $625/month
Roth for wife $250/month
Creating CDs for EF with excess IRA contributions (meaning when $625 maxes $4k per year for me, rest goes into a CD in post tax account).
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