Personal Update – 1st Quarter 2014

If you haven’t noticed already, I have reverted the blog back to the original theme. I liked the idea of having a responsive theme, but I wasn’t happy with the one I had. I spent a day bringing back the old look with some minor visual improvements. I’ll probably leave the design aspect of the website alone for a while as I do need to spend more time writing instead of worrying about the look.

IRA Contributions

I made it a point to contribute to my IRA early this year. At the end of January, I funded the maximum contribution ($5,5000 for 2014) into my own, and my wife’s non-deductible Traditional IRA at Vanguard. When the funds cleared, I immediately converted the entire contribution to our Roth IRA’s. Doing the conversion every year on the entire contribution ensures that we have no tax liability.

Asset Allocation & Fund Re-Balancing

With the new funds in the Roth IRA’s, I re-balanced our asset allocation for the year within all of our retirement investment accounts (401k, 457, and Roth IRA’s). I included a new mutual fund, the Vanguard Total International Bond Index Fund, into our allocation. Bond funds make up 10% of our total allocation. The International Bond Index Fund only takes up 20% of the bond allocation, while U.S. bonds from the Total Bond Market Index Fund makes up the rest.

Reduced Expense Ratio

We hold the Vanguard Institutional Index Fund in my wife’s 401k plan at work. We use it to approximate the Total Stock Market Index Fund because we don’t have the Total Stock Market Index Fund available in either of our work retirement investment accounts, and because our asset allocation is slightly different than the Target Date Retirement Funds. Another reason I do a custom allocation is that I am able to reduce the overall expense ratio a little bit by managing the investments myself.

The Institutional Shares of the fund only had an expense ratio of 0.04%. But recently, the 401k plan at my wife’s employer qualified for the Institutional Plus Shares. All of her shares transferred over automatically and reduced the expense ratio of the fund from 0.04% 0.02%.

What does this mean? It means that if you invest $10,000 for a 20 year period, with a hypothetical return of 8%, you would be paying $94.90 in fees instead of $189.33. Not very expensive to begin with, but I’ll take every dollar that I can save. Especially when we’re talking about an account that will have continuing contributions over many years.

529 Plan

I deposited a modest sum of cash gifts from Christmas and Lunar New Year into our daughter’s 592 plan. I think the plan to only contribute cash gifts and a token investment on her birthday is working and will continue to work well. As of the end of the quarter, her account is up 15.98%. Not bad.

Fidelity American Express Card

I’m very happy with my Fidelity American Express card. It’s been our primary household credit card since we got it and we’ve been reaping in the cash rebates for all of our common and extraordinary expenses. With only my original investment into the Spartan Extended Market Index Fund, and the automatic transfers into the brokerage account from the credit card rewards, the account is up 23.05% as of the end of the quarter. It’s like credit card rewards on steroids!

Emergency Fund

We’re still chugging along, making regular monthly deposits into our emergency fund. We’re at about the 4-5 month savings mark now, depending on how you measure our “regular” monthly spending. I’m sure it can be stretched out longer if it came down to it. I think once we hit the 6 month mark, I’ll still be depositing a small amount to make up for cost of living increases and inflation. Then, I’ll be saving more aggressively for a minivan and looking to I Bonds.

Annual vs. Monthly IRA Contribution Experiment – March 2014 Update

The Annual vs. Monthly IRA Contribution Timing Experiment March 2014 Update.

Annual Contribution Roth IRA

Shares Price Total Cost Market Value $ Gain/Loss
312.50 18.06 5,500.00 5,643.75 143.75

Account Summary:

  • No account transactions to report.

Monthly Contribution Roth IRA

Shares Price Total Cost Market Value $ Gain/Loss
104.01 18.06 1,818.00 1,878.47 60.47

Account Summary:

  • 03/01/2014 – Contributed $409.00
  • 03/03/2014 – Purchased mutual fund (VTIVX)

Annual vs. Monthly IRA Account Comparison

Account % Monthly Return Total % Gain/Loss
Annual 0.44 2.61
Monthly 0.65 3.33


  • Winter weather hampered economic activity, but hiring seems to be up.
  • The markets ended the month fairly flat.
  • The Monthly Contribution IRA is faring a little bit better than the lump-sum Yearly Contribution IRA. The fluctuation in prices is allowing dollar-cost averaging to work well.

IRA Contribution Timing Experiment

Quicken Tutorial: How To Add An IRA Or Keogh Account

How To Add An IRA Or Keogh Account

This step-by-step, narrated, video tutorial will visually teach you how to add an IRA or Keogh account in the Quicken Personal Finance Software suite.

Before You Start:

  • Have your latest IRA or Keogh account statement, or initial retirement plan/share balance (if you have a brand new account) available.
  • Optional: Your online credentials/login information for your IRA or Keogh account.

Watch More Quicken Tutorials

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