imported post
I kind of am recent to paying attention to finances and am a little behind in the game.
When I graduated and first started working, somebody told me to get into the Tax Sheltered Annuity and start saving for retirement. That person did me a favor. So, I did a bit of reading, talked to a "financial advisor" and did what I believed was the correct thing. I diversified into different mutual funds, invested regularly and forgot about it.
In late 2002, my work 403 account managers changed hands and the account broke in half. I didn't roll the funds into the new account, and the second account went into the default money market.I know that these were things that needed attention, but I was deployed right about then and failed to act. The old account stayed where it was, diversified as it was set up in 1995. The new account went into a money market with a little bit and earned next to nothing.
On my return to the real world, I concentrated on things other than finances, let my wife handle the bills as she always has, until late 2004 when I 'woke up' from my inattention. About that time I became aware (meaning paid attention to) the fact that we had a horrible balance on credit cards, and were paying interest rates that I thought were criminal, but apparently are legal in Deleware.
I took stock. I had some money in the old 403(b) and when I calculated my returns over the 10 years am sorry to say that I earned about 4%, and am REALLY sorry when I look at a chart of what the S&P did over those 10 years. The new 403(b) had a little money, but obviously wasn't making anything since it went right into a money market. I moved the money into straight S&P indexes and took a loan on the first 403 to pay off the plastic beast on my back. We still have a credit card balance, but it's less than 20% of what it was, doesn't have a criminal interest rate and we are throwing every spare dime at the balance. The loan on the 403 is 6% interest, and a portion of the interest paid goes back into the account.
We are 4 years into a 15 year mortgage, and both of our cars are paid for and reliable for now. We have 2 young kids, but the last one will get out of daycare in June so that will free up more money to pay down the debt.I guess the things that bug me now (other than I should have been paying attention a long time ago) are that I wish that I didn't feel like I had to borrow from the 403, and that I'm not sure what to do about college for the kids. My thinking was that investing in retirement is better than investing for college. The kids will be college age just after the house is paid for, and I will probably still be working 15 years beyond when the house is paid for. (I'm 36.) Michigan offers a 529 plan, but for the one kid I've seen that work for, I've seen it backfire for 3 others and the kid didn't get educated and the parents lost their money. Right now anyway, I'm in no position to invest in anything until the debts are paid down, although I'm keeping up the TSA and 403 contributions.
This website is really a Godsend. A lot of the Tom's daily discussions are over my head, but I'm learning a lot. My original thinking was that my TSA balance was much smaller than the other, so I would try timing that fund and leave the rest of my money in a stock index since the stock market always goes up. Now it's becoming clear that nothing is clear. So if I feel motivated to protect the TSA funds, then I should protect all the funds.
Anyway, that's my cautionary tale.
I kind of am recent to paying attention to finances and am a little behind in the game.
When I graduated and first started working, somebody told me to get into the Tax Sheltered Annuity and start saving for retirement. That person did me a favor. So, I did a bit of reading, talked to a "financial advisor" and did what I believed was the correct thing. I diversified into different mutual funds, invested regularly and forgot about it.
In late 2002, my work 403 account managers changed hands and the account broke in half. I didn't roll the funds into the new account, and the second account went into the default money market.I know that these were things that needed attention, but I was deployed right about then and failed to act. The old account stayed where it was, diversified as it was set up in 1995. The new account went into a money market with a little bit and earned next to nothing.
On my return to the real world, I concentrated on things other than finances, let my wife handle the bills as she always has, until late 2004 when I 'woke up' from my inattention. About that time I became aware (meaning paid attention to) the fact that we had a horrible balance on credit cards, and were paying interest rates that I thought were criminal, but apparently are legal in Deleware.
I took stock. I had some money in the old 403(b) and when I calculated my returns over the 10 years am sorry to say that I earned about 4%, and am REALLY sorry when I look at a chart of what the S&P did over those 10 years. The new 403(b) had a little money, but obviously wasn't making anything since it went right into a money market. I moved the money into straight S&P indexes and took a loan on the first 403 to pay off the plastic beast on my back. We still have a credit card balance, but it's less than 20% of what it was, doesn't have a criminal interest rate and we are throwing every spare dime at the balance. The loan on the 403 is 6% interest, and a portion of the interest paid goes back into the account.
We are 4 years into a 15 year mortgage, and both of our cars are paid for and reliable for now. We have 2 young kids, but the last one will get out of daycare in June so that will free up more money to pay down the debt.I guess the things that bug me now (other than I should have been paying attention a long time ago) are that I wish that I didn't feel like I had to borrow from the 403, and that I'm not sure what to do about college for the kids. My thinking was that investing in retirement is better than investing for college. The kids will be college age just after the house is paid for, and I will probably still be working 15 years beyond when the house is paid for. (I'm 36.) Michigan offers a 529 plan, but for the one kid I've seen that work for, I've seen it backfire for 3 others and the kid didn't get educated and the parents lost their money. Right now anyway, I'm in no position to invest in anything until the debts are paid down, although I'm keeping up the TSA and 403 contributions.
This website is really a Godsend. A lot of the Tom's daily discussions are over my head, but I'm learning a lot. My original thinking was that my TSA balance was much smaller than the other, so I would try timing that fund and leave the rest of my money in a stock index since the stock market always goes up. Now it's becoming clear that nothing is clear. So if I feel motivated to protect the TSA funds, then I should protect all the funds.
Anyway, that's my cautionary tale.
