Hey all,
I know it's been a really long time since I've written on here, and I'm sorry for that! School got really hectic and our lives didn't slow down until today... i finished my last final and am FREE, well at least until Monday when I start my first clinical, but honestly, it will feel freeing because I will be able to come home and not have any homework to do, I can just relax and actually have time to spend with PEOPLE instead of books!
This wednesday I went to Salvation Army in search of ANY navy blue top because I have to wear that and khakis every day for my clinical. I did not find one. On Wednesdays at the Salvation Army, all clothes are half off - I mean seriously, they're already super cheap to start with, but half off is even better! I DID, however, find a new pair of khaki pants! It gets better... they're Banana Republic and barely worn.... even better, guess how much their final cost was.... $2.50!!! No, I did not put the decimal in the wrong place. I think these pants were made just for me because they fit me perfectly!
Moral of the story: go to the Salvation Army on Wednesdays for clothes, a lot of times there's even stuff that still has the tags on it! What good buys have any of you found at thrift stores?
"You have made known to me the paths of life; you will fill me with joy in your presence" Acts 2:28
God revealed that the things Brent and I wanted to form a blog around are all addressed in Proverbs 3. He commands us to "let love and faithfulness never leave you," and tells us that "blessed are those who find wisdom, those who gain understanding." Verses 7-8: a healthy lifestyle, 9-10: money management, & the rest of the chapter will help shape our lives and marriage!
Thursday, October 25, 2012
Thursday, October 4, 2012
Where to Begin with Investing?
I learned about investing when I was in college for my finance degree –
but it felt like the more I learned, the more complicated it got. When I began earning an income once I
finished college and got married, I learned it wasn’t really as complicated as
it seemed. I wanted to figure out how I
could take advantage of starting to invest at a young age – so I read some
books, talked with wise people, and found out about the simple idea of“systematic” investing (also called "dollar cost averaging" from Benjamin Graham's book "The Intelligent Investor")
Basically – having the discipline to set aside money each time you get
a paycheck to be put into an investment account (some call it “paying yourself first”). Discipline was the hard part –
for the first time in my life, I was making my own money and paying my own
bills, insurance, gas, repairs, taxes, etc. but living totally free of anyone
else’s rules. All the "new money" made it really easy to go to any concert,
vacation, excursion, friend’s wedding, or adventure we wanted to! We wanted to be investing about 20% of my salary, but we had no idea how we would
get there.
But discipline gave me a few ways to keep it all in check…this is how Amy and I
decided to use our money to invest based on our learning:
1. 401(k) at work – Ask about a “company match.” <--(free money!)
This is usually a potential of
up to about 3% of your salary to begin your retirement savings.
Example:
Salary: $40,000
401(k) contribution
(taken out of your paycheck before taxes): $2,400 (or 6%)
Employer match:
$1,200 (half of the amount you put in up to 6%)
(after maxing out the 401(k), we still have 14% to go!)
2. IRA – Individual Retirement Arrangement
(Traditional or Roth): Almost any mutual fund, stock, bond, or other investment
can be put into this arrangement, depending on where you set it up.
a.
Money saved for retirement or other BIG
purchases (like a house).
b.
Either before-tax (Traditional) or after-tax
(Roth) – choosing one depends on what you think your tax % will be when you
retire:
i.
Higher % at retirement than right now: use Roth
IRA
ii.
Lower % at retirement than right now: use
Traditional IRA
c.
Limited amounts allowed to be put in each year
based on your income level
i.
Roth: up to $5,000
(basically)
ii.
Traditional: up to about $18,000
(This may get you
up to your 20%, so you wouldn’t need to try to invest any more unless you
happened upon some extra money you weren’t expecting!)
3. If there’s still more left after those two are
maxed out each year, I would look at finding a financial advisor to talk with
you about your “portfolio.” When things
get past this step, they can get complicated and time-consuming. Paying someone who knows what they’re doing
is a great way to not have to spend tons of time on something you’re not an
expert at. It may cost in the beginning,
but the value of their expertise and selection of investments pay off. If you try it, but don’t like it – shop around
and find another!
"A good man leaves an inheritance for his children's children, but a sinner's wealth is stored up for the righteous." -Proverbs 13:22
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