Habitual Savings for Retirement

Earlier this week I posted my review of Charles Duhigg’s wonderful self-help book on ‘The Power of Habit’. Duhigg explores how we form habits and what it takes to break those bad habits and form new, good habits.

“As people strengthened their willpower muscles in one part of their lives—in the gym, or a money management program—that strength spilled over into what they ate or how hard they worked. Once willpower became stronger, it touched everything.”

Like virtually all books I read these days, I instantly go to how this came help me financially and help me with my personal finances. Over the last couple of years I have gotten into the “habit” of saving aggressively for retirement and budgeting so I ensure I live within my means. In 2015 I increased my 401k savings and upped my emergency fund. In 2016 my wife and I both maxed out our Roth IRA’s and I again increased my work-sponsored 401k plan.

It became a game for us to challenge ourselves to save more and more. It became a habit and we kept pushing ourselves to save more. We knew the more we could save at an early age, the better our chances are at retiring early. We kept learning how to live on less money each month so that we could continue to allocate more towards savings and retirement.

In 2017 I again increased my 401k savings to 12% of my income. We both plan on maxing out our Roth IRA’s. We’ve even discussed the potential of maxing out my work 401k plan, which would be $18,000. I don’t think we’ll get there this year or even next year, but still, if I can max out my 401k before the age of 35 we’d be in a great spot at eventually retiring early (age 55). We’re expecting our first child very soon and plan on starting to save for college ASAP via a 529 plan. So the new, added expense of a child makes maxing out my 401k a bit challenging for now. We’re going to see how our budget changes with a child to now care for and raise, then go from there. Diapers and college, here we come!



Last Week Stock Market (Feb 13-17, 2017)


Last week, Feb 13-17, 2017, the stock market once again closed at record highs on Friday, just as it did last Friday, Feb. 10th. U.S. stocks closed the week up 1.5% and the S&P 500 is up 5.0% year-to-date. Investors continue to be fascinated by possible changes to the U.S. corporate tax code and the regulatory environment. As hopes for policy changes continue to rise, interruptions of these policy changes could cause market instability.

  • The U.S. has dropped on the World Economic Freedom Index from 11 to 17, and is now behind countries like the Netherlands and Lithuania
    • Here are the top 5 countries on the World Economic Freedom Index…
      1. Hong Kong
      2. Singapore
      3. New Zealand
      4. Switzerland
      5. Australia
    • Note: a key component to this index is tax rates, e.g. the lower a counties tax rate the more economic freedom it has
  • A report shows 79% of American’s plan to save their tax refund or use it to pay off debt this year
  • 30-year fixed-rate mortgage drops slightly to 4.15% this week from 4.17% last week (one year ago a 30-year fixed-rate was at 3.65%)
  • All-time low for 30-year fixed-rate mortgage was 3.31% back in November 2012 (all-time high for 30-year fixed was 18.63% back in October 1981)
  • Monthly mortgage payments consume nearly 16% of median income
  • The S&P 500 is up 248% from its March 9, 2009 low
  • Oil is down 0.6% so far this year and down 0.9% this past week (oil is down 63.2% from record high in July 2008)

Last Week’s Stock and Bond Index Performance (Feb 13-17, 2017)

  • NASDAQ 1.8% (YTD 8.5%)
  • Dow Jones Industrial Average 1.7% (YTD 4.4%)
  • S&P 500 Index 1.5% (YTD 5.0%)
  • U.S. Aggregate Bond Index -0.1% (YTD 0.5%)

How did my retirement portfolio perform last week (Feb 13-17, 2017)?

Below is a snapshot of my three biggest retirement portfolio mutual fund movers in terms of percentage gained last week.

The below mutual funds are held within my work 401(k) plan as well as two separate Roth IRA plans. All accounts are held with Vanguard.

  1. Vanguard S&P 500 Index Fund (VFIAX) 1.6%
  2. Vanguard Target Date 2040 Fund (VFORX) 1.1%
  3. Vanguard Extended Market Index Fund (VEXAX) 1.0%

Can I Beat the Stock Market?

I am actually not trying to “beat the market” with my retirement portfolio…I am trying to match it. I do have alternative indexes in my retirement portfolio to help possibly beat the market, e.g. Small Cap, REITs, International, and Emerging Markets. With that said, if I can beat the market I will absolutely take it (obviously)! In the last 90 days my portfolio is up 7.08%, whereas the S&P 500 is up 6.96%. So I am just slightly beating the market.

I am a liberal arts major and I am my own financial advisor. My goal with this personal finance blog is to show all Millennial’s that you have the power to take control of your personal finances through self-educating on money and finance, and by striving to become financially literate. That is what I have been doing for years now, focusing on becoming financially literate, so I can one day become financially independent. I’m trying to prove to Millennial’s that we can all do this and thrive with money. Follow my blog as I highlight relevant personal finance topics pertaining to us Millennial’s.


Last Week Stock Market (Feb 6-10, 2017)


Last week, Feb 6-10, 2017, the Dow (20,269) and the S&P 500 (2,316) closed at record highs on Friday, with both gaining roughly 1% on the week. The increase was late in the week after President Donald Trump said he would announce “something big” on tax reform in the next few weeks. Investors are very optimistic that lower taxes could finally fuel faster economic growth.

  • Consumers spent an average of $88 per day in January, which is down $17 from December (albeit that is inflated due to holiday shopping)
  • 30-year fixed-rate mortgage drops slightly to 4.17% this week from 4.19% last week (one year ago a 30-year fixed-rate was at 3.65%)
  • S&P 500 up 242% from March 9, 2009 low

Last Week’s Stock and Bond Index Performance (Feb 6-10, 2017)

  • NASDAQ 1.2% (YTD 6.2%)
  • Dow Jones Industrial Average 1.0% (YTD 2.6%)
  • S&P 500 Index 0.8% (YTD 3.5%)
  • U.S. Aggregate Bond Index 0.4% (YTD 0.6%)

How did my retirement portfolio perform last week (Feb 6-10, 2017)?

Below is a snapshot of my three biggest retirement portfolio mutual fund movers in terms of percentage gained last week.

The below mutual funds are held within my work 401(k) plan as well as two separate Roth IRA plans. All accounts are held with Vanguard.

  1. Vanguard FTSE Emerging Markets ETF (VWO) 1.6%
  2. Vanguard REIT Index Fund (VGSLX) 1.2%
  3. Vanguard Extended Market Index Fund (VEXAX) 0.9%

I am a liberal arts major and I am my own financial advisor. My goal with this personal finance blog is to show all Millennial’s that you have the power to take control of your personal finances through self-educating on money and finance and striving to become financially literate. That is what I have been doing for years now, focusing on becoming financially literate, so I can one day become financially independent. I’m trying to prove to Millennial’s that we can all do this and thrive with money. Follow my blog as I highlight relevant personal finance topics pertaining to us Millennial’s.


Retirement Contribution Percentage for 32

In January I was able to finally max out my personal Roth IRA ($5,500). This is the first year I’ve had my own Roth IRA and I am extremely happy to report that I was able to max it out. The reason I have not done this before is because I receive a company match and profit sharing plan via my workplace 401(k). So I have managed to save a decent amount already for my retirement, thanks to my company retirement plan, especially their match.

My wife is self-employed and we’ve been contributing to a Roth IRA for her for years. We haven’t always been able to max it out ($5,500) but we’ve have a few times and we’ve been great lately.

For the first time ever this year I decided to crunch all our retirement savings for 2016 to determine exactly what percentage of our income we are contributing to retirement. As a general rule of thumb, most certified financial experts suggest at least 10-15%.

Well I am happy to report that my wife and I managed to save 18% of our income towards retirement. I am extremely happy with that result. My goal is to get closer to 20% though, then begin throwing any extra money towards my mortgage.

Last Week Stock Market (Jan 30-Feb 3, 2017)


Last week, Jan 30-Feb 3, 2017, was a relatively flat and uneventful week. Especially when compared to last week when the Dow hit the historic 20,000 mark for the first time ever. But the NASDAQ closed on Friday at an all time high of 5,666. The stock market was down actually the whole week, save for Friday when it jumped 1%. A strong jobs report Friday aided the last minute jump of the week.

The economy added 227K jobs in January, which was more than expected, hence the Friday market bump. However, the unemployment rate in January raised slightly to 4.8% from 4.7%. And there are still 1.9 million American’s out of work for at least the last 27 weeks. Also, the average hourly earnings rate for January 2017 was up $0.03 to $26.00. Lastly, is that consumer confidence has fallen and is down from a 15-year high.

30-year fixed-rate mortgages remain unchanged this past week at 4.19%. However, one year ago 30-year fixed-rate mortgages were 3.72%. The all-time low for 30-year fixed-rate mortgages is 3.31%, and that was back in November of 2012. In comparison, the all-time high for a 30-year fixed was 18.63%, set back in October 1981. So we Millennials complain about student loan debt and the rapid housing boom in some markets, but lets be thankful our interest rates are historically in our favor.

Last Week’s Stock and Bond Index Performance (Jan 30-Feb 3, 2017)

  • NASDAQ 0.1% (YTD 5.3%)
  • Dow Jones Industrial Average -0.1% (YTD 1.6%)
  • S&P 500 Index 0.1% (YTD 2.6%)
  • U.S. Aggregate Bond Index 0.1% (YTD 0.3%)

How did my retirement portfolio perform last week (Jan 30-Feb 3, 2017)?

Below is a snapshot of my three biggest retirement portfolio mutual fund movers in terms of percentage gained last week.

The below mutual funds are held within my work 401(k) plan as well as two separate Roth IRA plans. All accounts are held with Vanguard.

  1. Vanguard FTSE Emerging Markets ETF (VWO) 0.7%
  2. Vanguard REIT Index Fund (VGSLX) 0.6%
  3. Vanguard Extended Market Index Fund (VEXAX) 0.6%

I am a liberal arts major and I am my own financial advisor. My goal with this personal finance blog is to show all Millennial’s that you have the power to take control of your personal finances through self-educating on money and finance and striving to become financially literate. That is what I have been doing for years now, focusing on becoming financially literate, so I can one day become financially independent. I’m trying to prove to Millennial’s that we can all do this and thrive with money. Follow my blog as I highlight relevant personal finance topics pertaining to us Millennial’s.


Last Week Stock Market (Jan 23-27, 2017)


Last week, Jan 23-27, 2017, was a good and historic week for the stock market. The Dow Jones Industrial Average (Dow) closed at 20,069 on Wednesday, January 25, making it the first time the Dow has closed above the 20,000 milestone. The S&P 500 and the NASDAQ closed at record highs on Wednesday as well. Looking ahead to next week, the monthly jobs report will be released on Friday. This will obviously be the first jobs report of 2017.

Last Week’s Stock and Bond Index Performance (Jan 23-27, 2017)

  • NASDAQ 1.9% (YTD 5.2%)
  • Dow Jones Industrial Average 1.3% (YTD 1.7%)
  • S&P 500 Index 1.0% (YTD 2.5%)
  • U.S. Aggregate Bond Index 0.0% (YTD 0.0%)

How did my retirement portfolio perform last week (Jan 23-27, 2017)?

Below is a snapshot of my three biggest retirement portfolio mutual fund movers in terms of percentage gained last week.

The below mutual funds are held within my work 401(k) plan as well as two separate Roth IRA plans. All accounts are held with Vanguard.

  1. Vanguard FTSE Emerging Markets ETF (VWO) 2.7%
  2. Vanguard Extended Market Index Fund (VEXAX) 1.4%
  3. Vanguard Total International Stock Index Fund (VTIAX) 1.3%

I am a liberal arts major and I am my own financial advisor. My goal with this personal finance blog is to show all Millennial’s that you have the power to take control of your personal finances through self-educating on money and finance and striving to become financially literate. That is what I have been doing for years now, focusing on becoming financially literate, so I can one day become financially independent. I’m trying to prove to Millennial’s that we can all do this and thrive with money. Follow my blog as I highlight relevant personal finance topics pertaining to us Millennial’s.


Last Week Stock Market (Jan 16-20, 2017)


Last week, Jan 16-20, 2017, was unfortunately another down week for the stock market. This was the 2nd consecutive down week for the market. Despite the two week setback, most all financial analyst are still bullish on the stock market long-term as Donald Trump begins his presidency as our 45th U.S. president. While the unique nature of Trump’s presidency brings uncertainty, markets should also find support from the broadly positive backdrop of economic and corporate fundamentals.

Last Week’s Stock and Bond Index Performance (Jan 16-20, 2017)

  • NASDAQ -0.3% (YTD 3.3%)
  • Dow Jones Industrial Average -0.3% (YTD 0.3%)
  • S&P 500 Index -0.1% (YTD 1.5%)
  • U.S. Aggregate Bond Index -0.3% (YTD 0.0%)

How did my retirement portfolio perform last week (Jan 16-20, 2017)?

Below is a snapshot of my three biggest retirement portfolio mutual fund movers in terms of percentage gained last week.

The below mutual funds are held within my work 401(k) plan as well as two separate Roth IRA plans. All accounts are held with Vanguard.

  1. Vanguard REIT Index Fund (VGSLX) 0.6%
  2. Vanguard Extended Market Index Fund (VEXAX) -0.8%
  3. Vanguard Small Cap Value Index Fund (VSIAX) -0.8%


Last Week Stock Market (Jan 9-13, 2017)

Last week, Jan 9-13, 2017, was a down week for the stock market. However, the market was only marginally down, with the S&P 500 index down -0.1%. The combination of solid job growth and President Trump’s expected pro-growth policies should spur stronger economic growth later this year and into 2018. But the pace depends on the timing and specifics of policy changes, as well as the possible negative effects of trade or immigration restrictions.

Last Week’s Stock and Bond Index Performance (Jan 9-13, 2017)

  • NASDAQ 1.0% (YTD 3.5%)
  • Dow Jones Industrial Average -0.4% (YTD 0.6%)
  • S&P 500 Index -0.1% (YTD 1.6%)
  • U.S. Aggregate Bond Index 0.1% (YTD 0.3%)

How did my retirement portfolio perform last week (Jan 9-13, 2017)?

Below is a snapshot of my three biggest retirement portfolio mutual fund movers in terms of percentage gained last week.

The below mutual funds are held within my work 401(k) plan as well as two separate Roth IRA plans. All accounts are held with Vanguard.

  1. Vanguard FTSE Emerging Markets Index Fund ETF (VWO) 1.4%
  2. Vanguard Total International Index Fund (VTIAX) 1.1%
  3. Vanguard Extended Market Index Fund (VEXAX) 0.5%