need advice on saving/investing

[jIM_Ohio]

If you are reading articles on what other people have and using those articles to form opinions or make decisions, then you are already broke- emotionally anyway.

The articles I find which are helpful (in both magazines and forums) are decision making in general. Look at the decisions people have and how they make the decisions. What to invest in, what to spend on, how to increase one or decrease the other.

[disneysteve]

Originally Posted by jIM_Ohio

If you are reading articles on what other people have and using those articles to form opinions or make decisions, then you are already broke- emotionally anyway.

I agree that there are inherent flaws in comparing yourself to others, but at the same time, we all have some desire to know where we stand relative to our peers. I always read the articles in Money or Kiplinger's or Smart Money where they talk about where you should be based on age and income. I realize everyone's situation is different, but I like to see if I'm in the right ballpark. Same for checking out different formulas that get proposed by various finance authors.

Sometimes I'm right on the mark. Sometimes I'm a bit behind and sometimes I'm ahead. Overall, I just like to see that I'm at least on par with others in a somewhat similar situation.

[zetta]

Check out The Complete Idiot's Guide to Getting Rich from the library. Right now, you should be aiming for Wealth Level 1, when you reach this level you will be on-track with retirement savings. The analysis in that chapter will help you set a retirement savings goal. In general I agree you should fund your goals in the following order:

1) emergency fund 3-6 months expenses
2) 401k until you reach the match
3) $4k to ROTH IRA
4) more to 401k until you are on-track for retirement

I don't know much about the SEP-IRA -- you might want to talk to an accountant to find out whether it is better for your husband to put money there or in a ROTH first.

[Ima saver]

Steve, it is First start growth fund. I started them for my granddaughters cause they had such a low minimum. I put in $420 6 years ago and it is now worth $340.
I saw that article in Money. That magazine is what started me learning about investing.

[kv968]

Originally Posted by Ima saver

Steve, it is First start growth fund. I started them for my granddaughters cause they had such a low minimum. I put in $420 6 years ago and it is now worth $340.
I saw that article in Money. That magazine is what started me learning about investing.

That fund took a harder than normal hit than it's peers in the dot com crash and never fully recovered. It also didn't fare well in the beginning of last year either. Lastly, it's not really a "growth" fund anymore but more of a large-cap blend with a slightly higher than normal expense ratio. In other words, you can find better similar funds out there.

[kv968]

Originally Posted by zetta

In general I agree you should fund your goals in the following order:

1) emergency fund 3-6 months expenses
2) 401k until you reach the match
3) $4k to ROTH IRA
4) more to 401k until you are on-track for retirement

I don't know much about the SEP-IRA -- you might want to talk to an accountant to find out whether it is better for your husband to put money there or in a ROTH first.

I would suggest putting money into a SEP-IRA before adding more to your 401k after you reach the match. Reasons being, your husband is behind on his retirement funding and with a SEP-IRA you most likely have a broader and better choice of funds than you do in your 401k. That may not be the case but if he's behind on his savings you should still probably do it that way.

And as Zetta said, maybe talk to an accountant before deciding which to fund first, the Roth or SEP-IRA but, IMO I'd say go with the Roth. You don't get the tax deduction you would with the SEP, but you'll get tax-free money from it when you retire.

[disneysteve]

Originally Posted by Ima saver

Steve, it is First start growth fund. I put in $420 6 years ago and it is now worth $340.

5 year average return of 4.66% with a 1.45% expense ratio.

Compare to Vanguard S&P 500 which has a 5 year average return of 8.41% and a 0.18% expense ratio.

Even though it is a small amount, get rid of it. You're better off keeping the money in a high-yield savings account.

[kv968]

Originally Posted by disneysteve

5 year average return of 4.66% with a 1.45% expense ratio.

Compare to Vanguard S&P 500 which has a 5 year average return of 8.41% and a 0.18% expense ratio.

Even though it is a small amount, get rid of it. You're better off keeping the money in a high-yield savings account.

Actually a 19% loss. I agree with Steve...get rid of it.

[anonymous_saver]

Originally Posted by zetta

Check out The Complete Idiot's Guide to Getting Rich from the library. Right now, you should be aiming for Wealth Level 1, when you reach this level you will be on-track with retirement savings. The analysis in that chapter will help you set a retirement savings goal. In general I agree you should fund your goals in the following order:

1) emergency fund 3-6 months expenses
2) 401k until you reach the match
3) $4k to ROTH IRA
4) more to 401k until you are on-track for retirement

I don't know much about the SEP-IRA -- you might want to talk to an accountant to find out whether it is better for your husband to put money there or in a ROTH first.

I disagree with the order of these suggestions. No matter what is going on, you must always put up to your companies match in your 401(k)! This is free money, you shouldn't turn it down. Once you have that step completed, I would save 1 month of an emergency fund. Then I would continue saving for my emergency fund but I would also start the Roth IRA. Once you have the full amount in your Roth IRA, I would increase your 401(k) contributions.