How do you manage your money without getting stressed out with a million accounts? When we talked about automatic investments a few weeks ago, some readers noted that having too many accounts was stressful to them. So let’s talk about some easier ways to manage the money, how to get a bird’s eye view of your holdings, and some tips to make your general financial life easier. [Read more…]
I’ve always been a saver. When I first started working at age 22, I saved a minimum of $100 a month, even though that was quite a struggle at the time. But I haven’t always been an investor. I signed up for a 401K, of course, but whatever investments I made above and beyond that were fairly haphazard, and I frequently let fairly large amounts of money sit in low interest accounts — a big no no. It wasn’t until my 30s that I stumbled on the idea of automatic investing as a way to regularly move money from my savings account to my Vanguard funds. Even once I signed up for automatic investing, I didn’t really get the real benefit of it: a concept called dollar-cost averaging. (Pictured: Rebecca Minkoff Zip Around Wallet — as part of the Nordstrom Anniversary Sale, the price is now $149.90, but after August 6 the price will go back up to $225.)
The idea behind dollar-cost averaging is that the market can be pretty volatile — sometimes stocks are up, sometimes they’re down. So if you invest your money in regular intervals, you get the benefit of the “sale” days (when prices are low) which helps balance when prices are high. [Read more…]
So. I recently did something fairly dumb, and I thought I’d share. I normally follow the advice given to novices, and the bulk of what I’ve invested is in index funds or Vanguard lifecycle funds with very low fees. But occasionally, I like to walk on the wild side and put a little extra money in stocks. Now, over the years I’ve always regretted not investing in certain stocks on Day 1 — big stocks, whose products I was extremely familiar with and knew the value of, to me at least. For example: I remember when Google IPO’ed. I’ve heard tell of people who bought Apple on Day 1… and I remember vividly my mother asking my brother if she should buy him stock in Nintendo (he was 11 when it IPO’ed, and said no).
So, I thought, wouldn’t it be great to buy Facebook on the day it IPO’ed? I could even buy some for my son, and tell him that we bought it on the very first day. I know I’m on Facebook several times a day, and as a publisher I know how Facebook is completely changing the way people read and acknowledge news. So what if Facebook hasn’t totally figured out how it’ll make money, I thought. Big deal. (Hint: allow bigger ads bigger than 125×125.) On the flip side, as a consumer, I don’t trust Facebook farther than I can throw it, and I don’t like to post pictures of my kid on it — but that doesn’t mean I don’t recognize it as a significant force in the future of publishing, friendships, and life. (Pictured: Forehead slap, originally uploaded to Flickr by chizoo.)
401K fees can be such a complicated topic — so when the good folks at DailyWorth offered to guest post I jumped at the chance to have someone wiser than myself cover it! – Kat
Is your 401k plan costing you too much?
Many people don’t realize that they’re being charged a fee (or fees) for participating in their 401k plan–and over time, those fees can eat up a chunk of your savings. (Pictured: Erosion Control? originally uploaded to Flickr by muffinman71xx.)
Shocked? You’re not alone. In fact, new federal rules requiring 401k plans to be more transparent about fees take effect in July — and women everywhere should sit up and take notice.
Back in January — inspired by a Mint article — we took a look at tax-savvy investment vehicles such as 401Ks and IRAs. Today, let’s look at some of the other tax-friendly ways to save, such as 529s and Health Savings Accounts (HSAs). Just as a reminder — according to the article, “The Value of Tax-Deferred Savings.” “[u]nless you make enough money to max out all of your tax-advantaged accounts (401(k), IRA, 529, HSA, and the like), it rarely makes sense to do any investing outside them.” (Please note, I am not a financial adviser — this is all just my personal knowledge, so take it with a grain of salt.)
(Pictured: PS1 Wallet, available in 8 colors at ProenzaSchouler.com for $165.)
Like we did before, let’s go through the main questions on everyone’s mind…