Sunday, December 16, 2007

Back to work! (aka time to invest)

Last week, my primary client contacted me and requested that I come in to document a small project. While I was there, I was given the go-ahead to start the next big documentation project (which will take a few months to accomplish, minimum), and the man who is my client wants me to build a website and write some content for one of his personal businesses.

In other words, it was a banner week for earning money and being given projects! In November, much of my time was dominated by writing a novel for NaNoWriMo (National Novel Writing Month), and without a major distraction for December, I was getting quite restless. During the 6-7 weeks I wasn't working, I spent far less pocket money than I normally do, and I kept other expenses to a minimum. Note that this doesn't mean I completely deprived myself -- very much to the contrary! I still went out to movies and meals with friends. I just stopped going out for the sake of going out on my own (which generally results in me spending of $30+ -- bus or taxi/magazine/something to eat/something to drink, etc). So naturally, while I was restless, I didn't want to go out much, unless I was going out with someone and/or doing something specific.

So, knowing that I have definite income coming in for the next 3+ months, I am going to start investing (instead of merely just saving) part of my paychecks, aside from what I set aside for my IRA contributions. Since I know that my emergency fund will not need to be tapped [for my periodic unemployment stretches], I will divert most of that money. Yes, I know that some people would say I should put that money towards paying off my debt, but I'm not planning on that. I'm 37, and while I have an IRA, an old 401k, and a tiny bit of stock from my hi-tech days, I am not close to what I should have for my retirement. I only started the IRA in Spring (and it hasn't performed well at all), and the 401k was from the hi-tech days. In short, before starting this IRA, I hadn't contributed to any kind of retirement fund for about three years. I also never had a retirement fund before my hi-tech 401k. So while my 401k has performed like a stadium rockstar (averaging 20+% earnings over the past 12 months), it would take years of that return to make up for the years I didn't invest. And I know that return won't last forever (in fact, I'm constantly shocked it keeps going at that rate).

I also want to have the invested money somewhere I can access, because if it does really well (pleasepleaseplease!), then I will use part of it when I'm ready to buy a condo.

I know that there is speculation about whether or not a recession is on the horizon. However, I know that guessing what the market will or will not do is a fool's game. I also know that I won't be dumping a huge sum in the market, so if it does recess, then it won't be a big loss. Instead, I will be gradually putting money into the account (aka dollar cost averaging), and building it slowly and based on how much I actually work.

So, I'm now off to research which service to use for investing, as I will start with buying a handful of specific stocks and also an index fund. If you use a service you recommend (or hate), please leave a comment and share your thoughts.

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