As a wedding gift, Tia and I have been receiving professional financial consultation. It has proven to be quite enlightening (due largely to the fact that we have proven to have less than a sophisticated knowledge of finances). Just today I learned the difference between types A, B, and C shares related to retirement accounts whereas, prior to the meeting, I didn't even realize that such a delineation existed at all. In fact, I only vaguely know what stocks are because of movies like Wall Street and high school economics projects involving fake money and stock purchases such as No Fear clothing and Harley Davidson motorcycles because that is all we were familiar with.
I also learned there are something like 15,000 funds you can choose from and they all perform differently, sometimes significantly so. On top of that, you have to decide how risk averse you are in your investments and evaluate your retirement goals in order to differentiate between conservative, moderate and high risk investing (has to do with the percentage of your money in equity vs. bonds), which only slightly reduces the number of choices. Kind of like going to the cereal aisle in the grocery store and not having a brand or even a type that you have a preference for beforehand.
It would be easier to pick out investments of course if you had, say, a lump sum of cash that you were just seeking a means of utilizing. Most of us (Tia and I included) don't have that luxury. Investment monies are monies not used for other things like paying down long term debt. In my youth (um, a few months ago before I started thinking about things like finances), I thought of finances simply: 'x' dollars come in, 'y' dollars are owed, 'z' equals the remainder of said dollars to be used or put into savings. Now I think about 'z' a lot more. How much should be allocated towards car loans vs. student loans (after all, student loan interest is deductible)? Should lump sums be paid? How much should be saved? Where should it be saved? What about retirement? Insurance? Rent vs. Buy? Roth IRA vs. 401K vs. wads of bills stuffed into couch cushions? How much cash reserve should be maintained in liquidity (3-6 months evidently)? Having someone to hold our hands through the process has been an enormous help.
What does all this mean............who knows as yet. We are finished putting our pieces in, now we await the final suggestions at our next meeting. One thing we were advised to do was refrain from purchasing a house. In order to do so safely (meaning having sufficient cash reserves in case the sky falls) and have sufficient down payment to secure a loan (a minimum of 10%, though ideally 20%) we would need to have roughly the accrued cash that Scrooge McDuck swims through at the beginning of every episode of Duck Tales. So, theoretically, if we found a $200K home, we would need a minimum of $20K plus closing costs ($5-6K) and enough to float us for 3-6 months should anything happen to one of our jobs (Lets say $15K for 6 months). Theoretically we would need a minimum of $40K and ideally $60K saved up before making a purchase. AS you might imagine, the whole rent vs. buy issue has been resolved.
In other news: We got another new kitten and our last one was just adopted. The new one is named Wynn and is a rabunctuous grey polydactyl (many toes).
Feeling sick this weekend. Both Tia and I have some sort of dry scratchy throat and I have acquired an annoying cough. I feel not great, but at the same time it seemingly refuses to take me down entirely. I would prefer to just have 24 hours of discomfort than this nagging nonsense.
My workmate Gena had her baby. Healthy and 9lbs plus. Work is going well, but it quite hectic since only Erica fully understands everything. I am less than 2 months in and Kelly is less than 3 weeks in, so there are a LOT of questions to be answered. Proves difficult on some of our busier days.
I need to grab something to eat and then lie slothfully about the house the remainder of this rainy Saturday. Hope everyone else is feeling much better than I.
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