My Financial Investments Revealed

My Financial Investments Revealed

About a month ago I wrote a post where I had been thinking about why I had not revealed more of my/our financial situation to the blogosphere. I mean I have been pretty open about the financial mess that I have gotten myself into and how this blog is a means of keeping tabs as I dig my way out. I also have discussed why I don’t discuss specific aspects of Mrs. ROB’s finances. The basic point is that she wants aspects of her financial life private. I respect her wishes and will continue to do that.

So as I have been thinking about this for the past month I am still not totally comfortable with revealing specific amounts of our assets. I think part of this fear stems from being judged. I mean I can certainly be judged by the stupidity of the mistakes I made, but for whatever reason I am not fully comfortable sharing any success, if any, that we have had. Maybe it is a defense mechanism. Maybe it is I don’t want to be accused of bragging (not that there is anything to brag about, I mean check out my series on How I Got Here and you will see I have nothing to brag about.

Anyway, enough about my thought process. I have been thinking about it and decided I would make the small step of revealing the investments that I have in my retirement portfolio, percentages within that portfolio, and the specific rationale behind those investments.

My Investment Portfolio

So I have three accounts in which I invest. I have a 401(a), a 403(b), and a Roth IRA. I would eventually like to open up at 457 as well and really take advantage of the tax-deferred benefits of the retirement plan. I didn’t know this, but found out that if your employer offers a 401(k) and/or a 403(b) with a 457. You can actually contribute up to $18,000 to both accounts. That is $36,000 that is tax deferred.

If we didn’t have so much debt I would actually do this in a heartbeat to take advantage of the tax deferred status of my assets. And it would lower my tax bill.

*As a side note check out the blog Root of Good (one of my favorites) to see how this family brought home six-figure incomes and only paid $150 in taxes. It is a great blog, a great post, and everything they did was totally legal (and really smart too). 

Anyway, so I am required to contribute basically 11% of my income to my 401(a) and I receive a match of 5%. The choices for my 401(a) aren’t great, but here is what I am invested here. The percentages indicated are how much money, for each account, is in each fund.

Fidelity Contrafund (FCNTX)–30%

Vanguard Mid-Cap Index Fund (VIMAX)–25%

Vanguard Small-Cap Index Fund (VSMAX)–25%

Fidelity Balanced (FBALX)-20%

I would invest most of my assets into just one large index fund, but that is not one of the choices for my my 401(a). So I decided to diversify my holdings across a Large Cap, Mid-Cap, and Small-Cap mutual funds.

*If you don’t know the difference between Large Cap, Mid-Cap, and Small Cap funds that is ok. Part of learning anything new is learning basic vocabulary. Go to Investopedia.com to get some great background information on the subject. I think I might even start posting some “vocabulary lessons” to help others understand what all these terms mean because it can be confusing.

I chose Fidelity Contrafund because it is the best Large Cap Fund I am offered. I chose the Vanguard Mid-Cap and Small-Cap Index funds because I love index funds. They are cheap, easy to use and understand, and provide me diversification in my portfolio. And I chose Fidelity Balanced because it is one of the best “balanced” funds out there. I wanted a fund that doesn’t have much volatility and has some bond investments in it. This was my best choice and it is a GREAT investment.

My 403(b) Investment Choices

So I am mandated to invest 11% into my 401(a) account. However, that will not get me to 15% of my income in investments. So I contribute a set monetary amount so that I can get to maximizing my tax-deferred accounts. BTW, if you have a 401(k) and/or 403(b) you can only contribute $18,000 max of your own money to those accounts combined.

I cannot add more percentage points to my 401(a) so to get close to the $18000 I invest in a 403(b). In my 403(b) I can basically choose any Fidelity Fund that I want, but I have only chosen two. My investments are:

Fidelity Growth (FGCKX) (50%)

Fidelity Spartan Total Market Index (FSTVX) 50%

I have the Fidelity Growth fund because I love the way this fund has performed over its history. I only invest in mutual funds that have track records of at least 10 years. Their fund has over a 30-year track record and has an average growth rate of 13%.

I chose the Fidelity Spartan Total Index Fund because this index fund (unlike the other two I have above) buys the entire market. I eventually will move all of my 403(b) to this index fund. But for now I am splitting the two. I just like the growth and track record of the Fidelity Growth Fund, but I am also convinced that Index funds are the BEST way for the average consumer to invest.

Roth IRA Investments

I have a Roth IRA and I only have one fund here:

Dodge and Cox International Fund (DODFX)–100%.

I have this fund (and I have had it the longest) because I wanted an exclusive international fund. This fund has low fees and is one of the best international funds out there. It has an excellent track record. I will move my money, eventually, to an index fund. However, I just haven’t pulled the trigger yet. I like the performance, the management, etc.

The Bottom Line

So these are my investments. They represent what I have right now. Eventually, my plan is to move most of my investments to index funds because they have extremely low fees and generally out-perform actively managed funds. I am somewhat limited in my 401(a), so until I get better choices (e.g. a Total Stock Market Index Fund) I will probably keep what I have.

So what do you think of my choices?

One thought on “My Financial Investments Revealed

  1. I think it is dangerous to put so much personal information out on the internet. It puts my teeth on edge. You think of judgement I think security and identity fraud. I know it may not be accessed by reading your blog but what if someone gets into your computer and gathers enough information? What if someone who really knows what they are doing gets enough information? I understand you think you are being helpful and want to be transparent but you really need to think about possible repercussions and your wife. She’s not thrilled about sharing personal financial information anyway. Do you know enough about your internet security and firewall to be positive there aren’t any risks? How many different networks do you plug into on a regular basis, wifi? There are risks you aren’t thinking about that maybe you should.

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