I always want to be cautious providing financial updates because I never want it to sound like bragging. Really, I just want to demonstrate just how possible it is to do this “massive savings” deal, encourage others to do the same, and celebrate some milestones along my journey.
401k
The biggest news item I have to share is that, at long last, I have reached the 2018 contribution limit for my 401k, bringing the total, under current market conditions, to around $30,500. Whew! This time last year, I would not have expected this to happen, so it’s amazing what happens when you tell your money what to do. I just think of those intelligent little bastards who start doing this when they graduate at age 22. I’ve still started comparatively young, but imagine where those people will be when they are my age!
IRA
The Roth IRA has reached $3,000, which allowed me last week to begin investing in better funds than the Vanguard Target funds. The Target Funds have a minimum investment of $1,000, whereas most other Vanguard investments have a $3,000 minimum investment. I moved from VFFVX (Vanguard Target Retirement 2055 Fund) to VTSMX (Vanguard Total Stock Market Index Fund, Investor Shares). The IRA contribution limit for this year is $5,500. I would like to reach this before the end of the year, but it is not as important as contributing to my G-IRA. It may still be possible, but it will be fairly tight. But aside from the G-IRA, I also want to increase my cash position. Whenever my investments in VTSMX reach $10,000, they will convert to VTSAX, the granddaddy of the FI community’s top investment choices, having the notoriously low expense ratio of 0.04%. But all things in time.
HSA
I have finally taken steps to invest my Health Savings Account. Thanks to my previous employer’s generous 50% match on HSA contributions, I have about $5,500 sittings in my old HSA. But because those funds were not invested, they have missed out on some incredible market growth over the past two years. I have a new HSA through my current employer, who does not offer a match, and will not be investing these funds. A general strategy for HSA investing is to always keep your full deductible in cash inside the account (to avoid having to withdraw in a down-market) and to invest every other dollar in the account.
Emergency Fund
No real updates here. I haven’t really talked about this, but I have around 5 months of expenses in here. I also have some additional money earmarked for car repairs or another car. I would like to have more money set aside for this, but keeping too much money in cash has the opportunity cost of not growing with market gains. Personally, I still want a greater cash position, even if it’s just part of saving up to visit Nepal, but that is not part of the emergency fund.
Praise God for still being employed :). All security in our jobs is an illusion. We trust in the Lord and not in our own strength or savings. We should, however, be responsible for ourselves insofar as we can. Being unable to stop spending is a heart condition, and if that’s the reason for having nothing at the end of the month, then it should be offered up to the Lord for change. Even when this is not the case, even when the money coming in is simply not enough, my hope is that everybody might have $10,000 sitting around to help with life’s challenges.
Society doesn’t offer any of us a good model of how to spend our dollars. It is average and above-average income-earners who have the most opportunities for building wealth, but I love reading stories of the below-average earners who really kick ass. Those people are my heros, because that was my family. I have not yet overcome the taboo against providing specific financial details such as income, but I always want to stress that as a junior-now-midlevel software developer, there are a great many jobs out there that earn more than I do, so it’s not like I’m sitting on a six-figure salary wondering where everyone’s at. Oh, no, quite far from that benchmark, but hoping to move in that direction next job and with more experience. The people who can kick my ass should be kicking my ass, that’s what I hope to see. Change how people use their money and you have the power to impact generations.