Tuesday, November 12, 2019

Quarter 3 Savings/Investments Update....



I recently posted our expenditures through the first 3 quarters of the year with a promise to update, by category, what those disbursements entailed. Thanks to paying off all of our debts a couple years ago, we are now able to invest or save approximately half of our income. YTD, this category is 45% of our bring home pay, which we hope will increase significantly the remainder of the year now that travel and helping prepare for a grandchild is out of the way 😊. And while savings/investments aren’t REALLY an expenditure, it’s one of the main categories we track, so here goes:

·       Retirement Accounts: To date, 42% of our savings/investments have been retirement account contributions. 30% of this money is invested in Vanguard’s Growth Index Fund (VIGAX) which returned 23.9% through the first 3 quarters and 30% is invested in a target date fund (VTHRX), which returned 14.3% during the same period. 25% of accounts are invested with a Fidelity total market fund (FSKAX) returning 17.8% and the remaining 15% is invested in a Fidelity total market bond fund (FTBFX) returning 9.7% to help even out market volatility. Get with your CPA or investment adviser to understand how to maximize tax-free or tax-beneficial investments to maximize investments and save your actual largest expenditure (taxes). This category will increase significantly during the last quarter of the year for reasons I will detail later.

·       Brokerage Accounts: We use Fidelity and Robinhood for our brokerage investments, which make up 35% of this outlay. For the Fidelity account, 75% is invested in FSKAX, a total market index fund returning 17.8% through the end of the 3rd quarter. 15% is in a 3 year CD returning a set 3.1% per year (not the biggest fan of CDs, but it was hard to pass up this guaranteed payout at a time when the markets were acting a bit crazy) and 10% is in a total bond fund (FTBFX), returning 9.7% through September. For our Robinhood accounts, we chose high dividend paying companies with consistent, year over year payouts. And, excluding Coke, we chose companies that were down at least 20% from 52 week highs but with otherwise solid financials. Through September we were up 20%, with Western Digital being our largest gainer (over 50%).

·       High Yield Savings/CDs: Our final 23% was put into high yield savings and CDs with Synchrony, an online bank. We are currently getting 1.9% returns on savings (was as high as 2.25%) and 2.65%-2.8% on CDs. We currently have about 8% of our net worth in cash due to looking for real estate opportunities (hopefully an announcement coming soon). Someone please tweet President Trump and tell him that negative interest rates aren’t in the best interest of most Americans.

Well, I hope this information is helpful to one of the two people who read this blog. I’d love feedback, questions, or even silly comments. Thanks for taking the time to read…..

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