That is the principle involved with the stock market, so why do I have such a hard time doing this. Right now we are low, so I should be buying buying buying. But no I look at my statement and see the price went down again and instead of being happy about the reduced price so I can buy more shares I feel like I am throwing good money after bad.

I am looking at the returns on the investments and wonder how long it will be until the stock market starts showing good returns again. Dave Ramsey uses a 12% average return for a lot of his compound interest calculations and instead I see the market with 5% currently.

I have not been following Dave Ramsey s advice to the letter and so yesterday I made a commitment. I am going to start following his advice. You see I was saving saving saving for retirement but a call weeks ago from a financial evaluator got me thinking. I should really get to a point where I am investing my money and not all of it into retirement based accounts (401K and Roth IRA s). Her point was I should be fully funding the Roth IRA before my 401K since I don’t get a match and other reasons (which yes that is true). But it is a head game. Just like Dave Ramsey says pay the smallest balance because you need to see progress, instead of going in order of interest rate. I like being backwards and funding my 401K first before my Roth because I fear if I was not getting it pulled first I would not be dedicated and put it towards my Roth I would pay bills (Mortgage or something) instead .

Right now my and I am sure others also retirement accounts are making around 4-5% per 12 month period. My Mortgage is 4.35% so I have reduced my retirement account savings and am going to start paying down my mortgage. If I reduce my retirement saving to 15% of my income that leaves me money to apply to My NEW PLAN.

A review of Dave Ramsey s Baby steps I am sitting as follows:
#1 Baby step 1K Emergency Fund: DONE
#2 Baby Step Pay off all Debt with the debt snowball: I have a revolving CC bill but I am going to Pay it in Full with my next paycheck and just call it done. I will still use my CC for things such as my online purchases but I think I am going to pay my CC bill in Full once a week. That way I stay ahead of the CC bill but at the same time I am using it for the CC rewards.
#3 Baby step 3 to 6 months Emergency Fund: I have 3 months DONE and will have an extra 1 month bills in my checkbook thanks to the NEW plan step 1. I have a secure job and if things change I will address the issue but for now the 3 month EF is fine.
#4 Baby Step invest 15% of income into Roth IRAs and Pre-retirement accounts: DONE I was currently doing above and beyond this. I have reduced this to apply to new plan.
#5 Baby Step College Fund: I saved a little for my son BUT I am calling this DONE. I have an option that I just have to wait out. I will be able to provide my son with a pretty nice option BUT it either requires some contract rewriting or an out of country work location. I have 11 years for one of these to happen so I am not stressing.
#6 Baby Step Pay off Home Early: Main New Plan issue
#7 Baby Step Build Wealth and give (I was already doing this by the extra retirement savings but the bad side was that it was restricted to retirement so adjusting this in new plan.


My thinking, the only blip on the horizon for my pay is in Dec. So this is my new plan:
#1. Save one month expenses in checkbook (so that the auto-funded payments and savings can continue even if for some reason my paycheck(s) are late in December).
#2. Take the extra money that I have each month and thanks to the reduction in retirement savings and apply it to my Mortgage (BS#6) this will mean paying off my house mortgage No Later than Sept 2019. I would really like to make this happen in 6 years BUT nine years is not bad, I think I will do better once some of my bills are able to be reduced. I currently am waiting out a cell phone contract which will free up some money for the next two years. 2 years from now I will need to add another line. But in two years my daycare expenses will drop and I will only need the weekend work sitter not the afterschool care. Then in 5 years my weekend daycare will end and I will only have out of town daycare needs. Also I for some reason always have a tax refund; I have not been able to modify my withholding to minimize this but each year I get better, so extra Tax Return will be applied. Finally my income usually increases by about 2% or more each Jan 1st. So I am aiming for 9 years but think I can do it in much less.
#3. Once the house is paid in full I will apply the extra money to: (for 6 Years)
Maxing the 401K (16,500x6=99,000)
Maxing the Roth IRA (5,000x6=30,000)
Purchasing non-retirement investments (stock portfolio) ????
Building a Deck for my PIF house. ???

I love the idea of a paid in full house because then 14 years from now when I start to pull my pension I very well could live just off my pension until I can start pulling out of my Roth Ira and then my 401K. The money I pull out of my retirement accounts I want to use for elaborate vacation plans. Yep that is how I want to spend my retirement years. I might get a part-time job after age 48 just to have something to do and so that I could continue to save for the future and fund elaborate vacation plans from the age of 48 until I can draw my retirement fund but ideally no job after 48 would ROCK.