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Ask Jesse: How do you implement your investing?

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 team! If you have a question you’d like him to answer in a future column, you can submit it here.

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  • katie says:

    I couldn’t figure out how to download and save it. When I clicked on the link it pulled up automatically, never giving me an option to download it. When I clicked save it said that I cannot save it and that I must print the document if I want it for my records. I tried to copy and paste it, but it pasted as an image that cannot be written in or added to. What am I doing wrong?

    Thank you,

  • Amy says:

    When you say “fully fund” your retirement fund, does that mean you plan to pay all your retirement at once into an account and be done with saving money for retirement?

    • Kimberly says:


      IRA’s have a maxium amount that you can contribute to each year. For 2010 I believe it’s $6000. I think this is what he is referring to when he says “fully funded”.

  • Karma says:

    Hi! I’m a financial advisor and know that the Roth IRA Contribution Limit for 2010 is $5,000 unless you are age 50 or older then the contribution limit is $6,000.

    The term “fully fund” in the above context refers to fully funding the maximum amount allowed for the year (i.e the $5,000 limit) at one time. Like Jesse states the other option would be to slowly add to the IRA’s for the year (the dollar cost average example he used).

    Hope this clarifies things and helps!

    • Crystal says:

      Thanks that was helpful. I thought he was saying he has enough to retire now! LOL. @Karma,

      • Crystal says:

        Sorry for the confusion! My husband was going to answer the question regarding this last night, but he had night court and didn’t get home until really late and then had to get up early and drive to a town a ways away for morning court this morning. (The joys of working as an attorney!)

        At any rate, what the previous commentor told you was correct. We’re just fully funding our Roth IRAs (we both have one) with the max contribution for the year.

  • Jesse, thanks for sharing with everyone. Although every family is unique, it is encouraging to hear what works for others as they strive to meet their saving / financial goals.

  • Amanda says:

    Investing dummy here… when you say that you have set up some of your accounts to invest automatically once per month, do you mean that you can do this with any checking and/or savings account, and if so, how do you set that up? Do you need advance knowledge, or do the people who work at the bank know what they are doing? Can it be any type of bank, or does it have to be a bank like ING or Hartford? Thank you!

    • @Amanda,

      We have an investment strategy very similar to Crystal and Jesse’s, including the automatic deposits into many of the accounts.

      Our children’s education funds are through a state (Virginia) college savings program, and that program coordinates the automatic payments for us. We just had to fill out some paperwork giving them permission to pull the funds from our bank savings account each month. I think an automatic system is pretty common among major college funds.

      My husband’s employer also has a program that allows them to take money straight from the paychecks and into the IRA. Again, just a bit of paperwork to set up- easy!

      As for other investing, our bank will directly transfer money from our savings account into accounts elsewhere monthly with our permission. This seemed to be pretty standard practice for our bank, so we didn’t have any issues setting it up.

      Hope this helps! 🙂

  • Hey Jesse (or Dana or Crystal)!

    So I’m a huge fan of Dave Ramsey but for a couple years have struggled with the 12% average mutual fund rates he regularly cites. He’ll go so far as to say that some of his have even done BETTER than that in the past 15 years or so….I know his often criticized for these numbers as being high — and I can’t help but agree. Where does one find mutual funds that truly average such incredible *long term* rates?

    Are you able to find rates near his averages? Where do you look?


  • Boyz Mom says:

    I personally have a Roth and a few other mutual funds, I deposit a certain amount each month, direct deposit from my checking account. I also at the end of the year, if I have extra money saved deposit an additional amount in my Roth. My phylosophy (sp) is that it is cheaper to pay taxes on it now then it would be in 30 year. The difference between a Roth and a trad IRA. My kids each get a certain amount of money each month ($50 in savigns and $50 in a money market for each of my 3 children) I tell them it is bail or college whichever comes first. haha But once its gone its gone and they then have to pay for their schooling.

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