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New Ebook on Building a Million Dollar Retirement Portfolio!

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The "Index Your Way to Retirement: How to Build a Million Dollar Retirement Portfolio" ebook is now available for sale on Amazon!  This book is literally a crash course in how to build a million dollar nest egg for retirement.  Those with Kindle Unlimited can read for free.  Please check it out and let me know what you think.  Also please leave a review on Amazon.



2018 Year End Index Investing Results

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Sorry it’s been a while since my last post.Busy end of year.Like pretty much everyone else my retirement accounts got KILLED during the end of 2018 market correction.The S&P 500 dropped from a high of 2930 September 20, 2018 to a low of 2351 December 24, 2018 or 20%.Today the S&P 500 is sitting at 2700-so it’s still in recovery.
As a long term, passive investor, I remained invested and continued my usual 401k contributions and squeezed my eyes tight during the volatility.My balance had climbed to $289k in September only to plunge to $241k by Christmas Eve.Today I’m only at $284k-still not quite at my account’s high.On a bright note-all of my year end dividends, around $6k, were reinvested at market lows-so I was able to buy when the market was essentially on sale.
2018 Performance Starting Balance: $229, 553.52 Final Balance: $255,875.42 Contributions: $44,850.03 Loss: -$18,528.13 or -6.7%
Actually it’s not that bad given the total market dropped 20%.That’s the power of dolla…

Fidelity's New Zero Funds - Free Index Fund Investing Is Here!

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I have to admit I was excited when Fidelity announced their new Zero Index Funds.  They now offer new Total Market, International, Extended Market, and Large Cap Index Funds with zero annual expenses.  This is a fantastic development for long term passive investors like myself.  Over the long term, the expenses charged by fund managers can significantly eat into an investor’s returns.  For instance, $10,000 invested in the an S&P 500 index fund over 30 years at an 10% rate of return will have a final portfolio value of $174,494.02.  If that mutual fund were to charge 1% in fees, the annual return lowers to 9%.  After 30 years the portfolio would be worth only $132,676.78.  That’s a significant loss incurred by the investor. 
So why is Fidelity foregoing profits to help out the little guy investor?  Trust me they’re not-the idea is steal market share from other brokerages like Vanguard and Schwab.  Also, most investors don’t just invest in a single fund-while they’re perusing the F…

The Million Dollar 401k – Who Wants to Be a Millionaire?

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Every few months the financial press releases an article on the increasing number of 401k millionaires.“Number of 401k Millionaires reaches all time high”“41% increase in number of million dollar 401k accounts”.  The standard advice is offered on achieving this milestone-401k millionaires stay at the same job for years, are high earners, save enough to get a company match-in fact up to 15% of their earnings, and start saving at an early age.Easy right? Of course the ~150,000 401k millionaires at Fidelity represent less than 1% of their total number of retirement accounts.If it’s so easy why is the average American’s retirement savings only $95k?
The average salary in the United States is $56,000 before taxes.Federal taxes drop that number down another 20% (assuming you live in a no state income tax state). After housing-$12,000 rent, transportation $9,000, food $6,000, health care $4,000, and miscellaneous expenses $5-$10,000 there’s not much left for retirement savings.Add in the un…

Index Investing 2018 YTD Portfolio Results

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Happy 4th of July!  

I'm continuing my journey to financial freedom despite this depressing market. I thought I'd share a portfolio update as we go into the second half of the year. 








July 2018 YTD Portfolio Performance: Dec 31, 2017 Balance: $234,975.18July 4, 2018 Balance: $265,376.22Total 2017 Contributions (including employer): $26,294.89Allocation: 8-10% bonds depending on the month, delta stocks2018 July YTD Total Return: 1.75%Old Target Date Fund Return including fees: 0.71%FUSVX S&P 500 Index Fund YTD Return: 2.94%
Ugh 2018 Market Returns!  Technically, because of all the volatility this year-I've been able to pick up shares on the cheap...but they keep giving back gains a few months later.  Not that this year's returns matter because I am investing for the long term. At least I’m beating my crappy old target date fund-but I still underperformed the S&P 500. Basically my contributions have made up most of my portfolio gains so far this year.  These are the …

A Lesson on Locking in Losses: Remember Buy Low and Sell High (or Never)...

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Towards the end of January I decided to rid myself of my REIT index fund, FSRVX, and exchange half of it for an Emerging Market Fund, FPMIX, and a Total International Market Fund, FSGDX.  At the time I rationalized that I had very little international exposure in my portfolio and I was tired of my REIT fund’s under performance-I believe it was down around 6% at the time I sold.  If I’m honest, I was probably chasing last year’s outstanding returns for international funds. The financial news media’s chatter about Amazon being the death of the American Mall, and thus Retail REITs, finally caused me to give in.  And of course, six months later my Emerging Market fund is down -7.7% YTD, my Total International Fund is down -4.8%, and the REIT I sold is up 1.2%.  So you see-I sold my REIT when it was down, locking in losses, and bought two international funds just as they were about to lose value.  


Learn from my mistake-buying high and selling low is always a losing proposition.  Thankful…

Market's Finally Headed in the Right Direction!

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I know intellectually that I shouldn’t pay attention to the day to day whims of the market but it feels so good to see the market finally headed in the right direction again-up! Yay! As you are no doubt aware the market has been in correction for the past 3 months with the S&P 500 dropping from a peak of 2872 January 26 to a low of 2581 February 26. Since then it’s been pretty much been going sideways until Friday of last week. Today the S&P is at 2722-not back at its January highs but headed in the right direction (see pic below-I’m so not a fan of the new Google Finance format BTW-hard to do long term research). I’ve heard full year forecasts of 2800-3000 for end of year 2018-here’s hoping.
Now I know what you’re thinking-I thought we were buy and hold investors, over the long term the market goes up 8-10% a year, and that we should celebrate these opportunities to buy stocks at cheaper prices? All true-but it I have to admit it’s psychologically disheartening to see my bi…