100 days left

9002009.jpgOkay so from today, there is 100 days left on my countdown clock for me to reach debt-zero. For those of you that missed my original countdown post, I made a goal to myself that I would get my credit  card debt completely paid off by Feburary 26th, which is what you see on my right sidebar. I am still currently at -$5529.61, mainly because I wasn’t able to put any money towards my cards this week due to Christmas shopping.

Okay so when I get my credit cards paid off I plan on opening up three types of investment accounts, which I am really excited about.

  • Roth IRA
  • General Investment account
  • Money Market

1.) For the Roth IRA, this is simple concept: the sooner you start, the better you’re off. I know that saving up for a retirement account is a good idea and I’m sure that when I’m 59 1/2 I’ll be happy that I made that investment. And I choose the Roth IRA oppose to the traditional IRA simply because I think it would benefit me more now while I’m not in the high tax bracket. From what I understand, in the tradational IRA, although it is tax deductable, I would end up paying more for my tax cuts when it’s time to take it out because I would be in a higher tax bracket.

2.) The general investment account is where I do my experiments. I’ve been doing some reasearch and I’m still not sure what I want to invest in here but I know that the S&P500 is always doing good so I might go with that. Though this account, I want to save up for my down payment on my first home. My goal is to have a house in about 5 years so I’m hoping that I can get this account somewhere around 40 thousand by then. In my last year before I buy that house, I’m probably going to take my money out of this account and put it into a more “safer” account. Probably another money market account.

3.) Money Market. this account is where my emergency fund would go into. You never know what life is going to throw at you so I think it’s very important to have an account for those emergency times. Especially since I want to invest, it’s really important to have an emergency account because the worse thing that could happen is, I end up in some kind of accident and have to take out money from my IRA or another investment account because I don’t have anything else to resort to. Not a great deal here.

Well in the meantime, I will be doing more research on investing and I’ll keep you updated. Til next time

  1. AllFinancialMatters » Blog Archive » JLP’s Weekly Roundup - pingback on December 15, 2006 at 10:03 am
  2. Haha. JLP thinks you’re a girl.

    “Money Walks only has 100 days left in trying to meet her goal of being debt-free. “

  3. Binary Dollar,

    Ha! Yea, so he does.
    Hopefully he’ll catch on though…

  4. I highly recommend you rethink putting your down payment fund into a “general investment account.” The stock market is no place for funds that you will be using in five years or less.

    Imagine this: you get $20,000 in that account after two years, and all of a sudden the economy runs into a recession and the value of your account drops to $10,000 over the next three years. Where will your down payment be then?

    Instead, I recommend you put your down payment fund into certificates of deposit (CDs), high yielding money market accounts, or treasury bills. Sure, you won’t earn a whole lot on those deposits, but you certainly will not see a 50% decline in value as you could very well see with the stock market in a given 3 year period.

    Be sure to look at what the s&p 500 returned between 2000 and 2002 before you decide how to invest the money you intend to use to achieve one of your most important long term goals.

  5. Moneyman,

    I have heard that index funds do quite well and the one I was looking at was S&P500, which is up this year by 14.06%. See, what I was thinking was if I gave myself 5 years to create my down payment account, first 4 years I want to invest in something more aggressive, something yielding high returns, and in the last year protect what I made by putting all of it into CDs. This way I’m not taking as much risk in losing anything in the last year before I buy. I don’t mind taking risks at the early stages of my investments and although I agree that putting all the money in a CD is a safe way to go but I’m looking for something more aggressive.

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