Confusion and FrustrationI’ve already stated that I’m throwing in the towel on the $10k in savings by the end of the year. At the time, it was still remotely possible to achieve, but now, a few weeks later, it’s not a goal that I’m confident that I can accomplish.

And I’m not sure if anyone has noticed that I’ve mysteriously misplaced a couple of my original goals…

One was to run a marathon in a competitive fashion and the other was to increase my passive income.

The first isn’t happening. No way, no how. I’ve got the shoes. I’ve got the time. But I don’t have the stamina. I’ve given it the “old college try” a few times this summer — running 6 or 7 consecutive days in a row — but an eventual bout of asthma always put a stop to it before I really got into a good routine.

It’s just not there anymore, and this late in the game, I’m not sure I could even get up to speed to run that far in time for the NYC Marathon in November (sponsored by ING — how appropriate!). Maybe next year.

The other goal was to increase my passive income considerably. I stated that I wanted to triple it in 2008. Yikes! What was I thinking?

So far, I have definitely increased my passive income over years past, but not by a whole lot. Certainly not triple. From day one, it was an unrealistic goal.

That’s okay. As long as I’m working less and still making a few bucks as I sleep, it’s all good. And I think the entire idea stemmed from the fact that I knew I wanted to work less — I just didn’t want to earn less too. So, looking at it that way, I half-way accomplished the goal since I am definitely working less. Kinda? Sorta?

But the new goal I’m adding stems from a comment made by Coupon Artist earlier this month. She inquired as to why I’d increase my 401k contributions more (I’ve already hit the maximum match) when I could be contributing to an IRA instead.

I admitted to my ignorance on the subject, but having read up on it a bit over the past few days, rather than strive for the $10k in savings this year, I’m going to instead open a Roth IRA with Vanguard and contribute the full $5k before the end of the year (though I’m aware I could wait all the way up until April 15, 2009).

I still can’t really grasp the advantages of a Roth IRA, but in the long-term picture, having some money there certainly can’t hurt.


  1. I was under the understanding tho that a Roth makes you pay taxes on the money now, when technically you’re in a higher income bracket because you are still earning your wage. My finance guy told me a long time ago that a regular IRA was better because when you withdrawl it later you’ll pay taxes on it then when you’re in a lesser tax bracket.

    You and I are about the same age, I’m a couple years older, so the priciple about being in a higher tax bracket now would certainly apply.

    He also mentioned the tax savings (filing your annual taxes) would be benefitted by doing a regular IRA. Since I bought my house, that hasn’t remained true as the house benefits me more tax wise. But for someone who is married, it may be more of a benefit in filing taxes – I’m not sure.

    Just a blurb about what my Morgan Stanley/Dean Whitter guy said! Might be something to consider.

    ALSO, put it in some sort of stable goods – my standard IRA has been in stocks and is up and down like a toilet seat! I’m looking into switching it into some sort of account where it is secure and I won’t keep losing money. For that reason alone – your savings account is more secure – unless of course you’re with some bank that is gonna go under next month!

    Let us know how it turns out – ofcourse I know you will!

  2. Heather, you hit the nail on the head when it comes to my confusion about Traditional vs. Roth.

    I totally understand the part about being taxed now and being taxed later and I guess that’s where I’ve never understood why so many say to immediately go with the Roth. I’m guilty of blindly following (or at least I’m on the verge of being guilty…)

    I don’t know what tax bracket I’m in right now off the top of my head, but I’m semi-certain that I’ve plateau’d when it comes to my earnings.

    I’d say I peaked a few years ago, now I’ll be steady for a decade or so, and then I’ll start to slowly fade in the decade prior to retirement.

    I guess all I’m saying is that I don’t expect my income to keep going up and up and up (in which case a Roth would be better), so I don’t expect my tax bracket to move higher and higher either — so now you’ve got me thinking of going against the grain an opting towards the traditional…

    I suppose it’s a good thing I’m not really planning on making a move either way until December!

  3. Well, whatever happens – I know you’ll keep us informed on PAC!

    Good luck with todays news of getting your PMI taken care of! Can’t wait to see the hilarity insue with Countrywide! (I am laughing WITH you – honestly!! I feel your pain!)

    If they send you another one of those notices, your photo of the day needs to be of the guy with his head up his rear with a caption of “countrywide’s star employee”

Leave a Reply