I would love another post on investing based on your personal experience. I am particularly interested in how you implement your investing. Do you wait until you have a specific amount in your savings account, do you invest a percentage per pay day, or do you have some other strategy that you follow? Many thanks! -Tess
We do some of all of the above. It’s probably not the best method, but it’s how I have things set up for now, fully expecting changes in the future.
We primarily use mutual funds as our investment vehicle of choice. I have set up some of our accounts, including Roth IRA and children’s savings, to invest automatically once per month.
This takes advantage of the dollar cost averaging, meaning that, if you invest a given amount automatically each month, you will catch a fund at a different value from month to month and will be able to buy more of the fund if it is down in price, as opposed to buying a lot of shares at the same price with one yearly lump sum purchase.
We are planning to fully fund our retirement funds in one lump sum at the end of this year and have been saving for the last few months with this in mind. I hope to have this set up with the monthly depositing later on (hopefully next year!), but this year, because we put a lot of our savings goals on hold to pay cash for our house, we didn’t do that.
Jesse Paine is a licensed attorney who owns his own law firm. He’s married to Crystal and is the numbers nerd of the MoneySavingMom.com team! If you have a question you’d like him to answer in a future column, you can submit it here.