Vanguard account

In mid-2002, I started a Roth IRA account with Vanguard. I did some research at the time trying to decide who I should go with. I think the factors that compelled me to choose Vanguard were the low fees they have on their mutual funds, ease of opening an account and the fact that I had heard Suze Orman recommend their Total Stock Market Index fund. So, I opened it and have never looked back. It was a struggle at first to put the monthly contribution in, and then like it always seems to happen, you adjust to whatever amount of you have on hand. Now I don't even feel or notice the bi-weekly contributions that automatically come from my savings account.

Now, I'm thinking about opening a separate account for investing purposes. I've never had any investments outside of a retirement account, so this is all new territory for me. It's a little different. With the retirement account, I don't get too worried because I know I have a long time before I'll need the money, so I don't get freaked out if the market dips one day and is up the next. I usually don't even think about it. I just withhold as much as possible and I'm letting the retirement chips fall where they may!

As this is new territory, it's a little scary! I don't really want to invest in anything too risky because I'm not sure when I'll need this money back. I could use it as a down payment on a house, but that's not something I'm considering at the moment. But it's a possibility, so I don't necessarily want to invest in something and then pull it out as the market's going down in two years.

So here's the plan: I called Vanguard today and spoke with a rep. She emailed me a link to a questionnaire that I will fill out with all my particulars - when I want to retire, how much I make, how much I save, what's it invested in, when do I need my money back, etc. Once they get that, they'll contact me to set-up a phone interview and then we can decide what would be the best way for me to invest my money. I'm willing to go through the process and see what they suggest. This should be interesting!

I could just put the money in an online savings account and earn just over 5%, but I'm hoping I'll be able to do better than that. Ideally, that is my goal.

Maxed out for 2006

I made my final payment to max out my Roth IRA for 2005 today. The due date (in most states) is April 17th, so if you haven't done it yet, get on it! I started my Roth IRA in 2002 and I have maxed it out every year. This year I set up my account so that it will max out by December automatically. That makes me feel happy. Or maybe accomplished is a better word.

Money can't buy happiness...

I saw an article on Yahoo today about how lottery winners can end up broke just like anyone else. The worst bad story in there was about a guy whose brother tried to kill him to get the inheritance. That is just awful!

I guess it goes to show you that money can't buy happiness! Also that some people REALLY don't know how to handle money. It's a skill and the hardest part about saving money is having the discipline to do it!


On a retirement note: I do have a Roth IRA at Vanguard and I just changed the investment. For the last few years, I've been in the Vanguard 500 Index Fund. Last Friday, I switched my IRA to invest in the Vanguard Target Retirement Fund 2045. I don't want to retire in 2045, but I'm trying to be agressively diversified! These new target retirement funds reallocate themselves every year as you get closer to retirement. All I have to do is just keep putting money in there and forget about it.