Wednesday, May 9, 2007
Current Prosper Rate of Return
Using excels XIRR function, as described over at Proproser says I've netted 15.63% ROI. Thats not too shabby, however my passion for finding good loans has disappeared as of late. Perhaps its because I spend too much time looking at charts such as these: Prosper Membership By Month (EricsCC.com). The membership is constantly growing, and there are more and more poachers. More eyes on the good loans. There are more loans, so perhaps its just my amazing ability to tire of a hobby.
Order of investments
I was eating lunch the other day and this topic came up. Actually this topic seems to come up about once or twice a year or so, probably around the time of paycheck contribution elections. When the topic first came up, I just listened and couldn't make heads or tails about why its smarter to go one route or another. Now I feel like I know exactly what to do, read on:
401k with employer matching should be first, this is 100% ROI plus an average of 10% annually or so. Not only is this tax deferred (meaning compounding works greatly in your favor) but it also lowers your taxable income. :)
Putting in more than your employer will match to should be further down the list.
Second is definitely an employee stock purchase plan. My company offers a 15% discount at the offering period, with two offering periods a year. Some companies make it even more worth your while with various options or the like. So if I can go without 10% of my salary for 6 months, I get 1.5% of my salary free two times a year. Since you can take the principle out at every enrollment, I can count this as a 30% APY on 10% of my salary. A $60,000 salary would net me $1,800 a year. Thats a nice Christmas bonus! If I let the first $900 ride on an average of 10% stock increase, its an extra $45. Of course the 15% is taxed as normal income, and I'd have to pay capitol gains tax on the $45 if I took it out before having it a year.
Third, if you plan on having a larger income when you retire than you do now, you should max out your Roth IRA before contributing more towards your 401k.
As an important disclaimer I'm not a math wiz nor do I claim to know all the tax implications. Please feel free to add to the comments if I make any mistakes!
401k with employer matching should be first, this is 100% ROI plus an average of 10% annually or so. Not only is this tax deferred (meaning compounding works greatly in your favor) but it also lowers your taxable income. :)
Putting in more than your employer will match to should be further down the list.
Second is definitely an employee stock purchase plan. My company offers a 15% discount at the offering period, with two offering periods a year. Some companies make it even more worth your while with various options or the like. So if I can go without 10% of my salary for 6 months, I get 1.5% of my salary free two times a year. Since you can take the principle out at every enrollment, I can count this as a 30% APY on 10% of my salary. A $60,000 salary would net me $1,800 a year. Thats a nice Christmas bonus! If I let the first $900 ride on an average of 10% stock increase, its an extra $45. Of course the 15% is taxed as normal income, and I'd have to pay capitol gains tax on the $45 if I took it out before having it a year.
Third, if you plan on having a larger income when you retire than you do now, you should max out your Roth IRA before contributing more towards your 401k.
As an important disclaimer I'm not a math wiz nor do I claim to know all the tax implications. Please feel free to add to the comments if I make any mistakes!
Monday, May 7, 2007
Stop the Spending, Start the Budgeting!
Somethings got to budge(t)!
I haven't saved a single dollar in 4 months!
I haven't saved a single dollar in 4 months!
Tuesday, May 1, 2007
Pearbudget, MyMint, Quicken, NetworthIQ
Sheesh, when will MyMint come out?! I'm tired of all this hype and waiting!!!
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