Investing Guide

Remember to max out your Roth on January 3rd, 2007. This lets your money compound for the whole year. If you did not contribute last year, you have until April 15th, 2007 to contribute your maximum of $4,000 for the 06 year. I contributed my $4,000 for the 2006 year on January 3rd, and I plan to do the same for 07 year. My Roth performed quite well last year, earning about 24 percent last year. It did well because most of my holdings were foreign stocks. I use the holdings in my Roth for foreign exposure.

I currently allocate 25% to each of the 4 American Funds. They are Capital Income Builder (CAIBX), Capital Growth and Income (CWGIX), Small Cap World (SCMWX), and New World Fund (NEWFX). I plan to put money into these four funds again this year. I am not paying a load for these funds. It is never a good idea to buy a loaded fund. There are plenty of great no-load funds out there. The load is paying the financial advisors anyways.

I am a little concerned about asset bloat with the American Funds. All four of these funds have gotten very large. CAIBX and CWGIX hold larger capitalization securities, but they are both 80 billion dollar funds. SMCWX is suppose to be a small cap fund, but it is a mid cap growth fund according to Morningstar. SMCWX is a 20 billion dollar fund with close to 600 security holdings. Most small cap funds close their funds before the reach one billion because they cannot get a large enough position in small companies if they have too much money. NEWFX stands at 10.9 billion, but I like this fund because it is a conservative emerging market fund. It holds up well during bear markets.

My other two early retirement books just came in the mail from Amazon. The two books are Your Money or Your Life by Joe Dominguez and Vicki Robin and Work Less, Live More - The New Way to Retire Early by Bob Clyatt. I’ve read about 2 chapters from Work Less, Live More. I like the book so far.

Most of these early retirement books are based on common sense. Here is what I have learned from them so far.

1.  Live below your means. This is so you can accumulate a large enough nest egg to retire early. It means being frugal, but not cheap. Frugal means economic use of resources. Don’t waste money on useless things that depreciate in value. Things such as nice cars, large houses, and expensive things used to show off status. Instead, invest in appreciating assets such as stocks, bonds, and real estate.

2.  Set goals and plan a budget if you must. I think setting realistic goals are very important part of every person’s financial plan. Setting at least an annual goal of things to accomplish is a must if you want to retire early. My goal was to increase my net worth by X amount of dollars each month as well as a yearly goal. I am usually able to meet my goals, which is good. I do not keep a budget of what I spend, but I have a rough estimate of what I spend each month.

3.  Learn the basics about investing. If you do not want to spend much time looking at investments, learn about index investing and invest in index funds using Vanguard or other low cost mutual funds.

I like learning about personal finance and investing. It’s a life long learning activity that I find interesting and enjoyable. Retiring early is something I have wanted to do for a long time, even though I’ve only started my career. It is the freedom that I crave; the freedom to do what I want, when I want. It is not that difficult to retire early too. It takes a lot of planning and some sacrifices and a bit of time.

I got an awesome invitational letter in the mail the other day for AT&T Universal Cards Payment Partner Program. For the next month, any amount I pay over the minimum, Citibank will match 20% of my payments, up to $550. Once enrolled in the plan, users will no longer be able to use that card and after that program is over, my credit limit will get reduced by the amount I pay off.
I owe about $3,000 on that card with a 0% APR which will be due in April. I just signed up today and was put on hold for 10 minutes. I guess a lot of people are also signing up for this sweet deal. It is a different number than the normal customer service number.
Too bad my second invitational letter was on my other Citibank card that no longer has a balance. That offer only matches 10% instead of 20%.

My plan for this credit card is to pay off my credit card in full after 3 months and get the $550. This is even more than the amount I earned off the balance transfer itself.

I hope I get an invitational letter for my other AT&T credit card too.

Concept of plastic money developed with the introduction of visa card. If we talk about american credit cards, trend has completely changed and people started giving preference to the 0 credit cards because of no annual fee. Due to competitive banking market different banks have also waved off the credit card fee. More over mastercard payment can be done online as well because of online banking system. People with credit issues, usually qualify for secured credit card.