Monthly Review 

Financial Outlook – Summary of Spending and 401k Allocation (Jan & Feb ’05)

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Fund % Allocation
International Equity 10.59%
Small Cap 23.26%
Employer Stock 5.88%
International Bond 0.90%
Equity Index 26.90%
Emerging Market Equity 32.48%

This is a very aggressive and risky portfolio, as you can see. Only 0.90% is in bonds, the rest are in stocks. The International Equity, International Bond, and Emerging Market Equity Funds are all international funds. Small Cap, Employer Stock, and Equity Index are all funds consisting of stocks. I figured since I’m only 24, I have a long long time to watch my fund appreciate and I wouldn’t have been satisfied with a couple percent in a bond fund, even if it was a small percentage. Thus far, the gamble has paid off. While the allocation hasn’t been this way since June 2003 when it started, it’s been relatively close to this. In the first six months ending in December 2003, the 401k appreciated around 8% (calculated as the total return divided by the ending balance, so it was probably much higher by other calculations). In the calendar year of 2004, it appreciated 10.7%. So far in the first three months of this year, it’s appreciated 1.9%.

I don’t know how long I’ll keep the allocation this way but with how the economy is doing (the dollar so weak), international appears the way to go. I wonder what JLP would say about such an aggressive portfolio. 🙂

Anyhow, that’s it! I’ll probably give an outlook update at the start of each month and next month, look for some goals I’ll be setting up and hopefully reaching. As usual, comments are greatly appreciated!

{ 6 comments, please add your thoughts now! }

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6 Responses to “Financial Outlook – Summary of Spending and 401k Allocation (Jan & Feb ’05)”

  1. JLP says:

    HOLY COW that is a lot in Emerging Markets!


  2. jim says:

    I knew you’d overreact. 🙂

  3. TC says:

    Aggressive is the only way to invest with regard to your 401K.

    My comment relates to your amount of savings going into your 410k. Yes, everyone says you should max out your 401k, however does it make sense to put all that money into an account that you will eventually have to pay taxes on?

    A theory that I believe in as strongly as I believe in the Easter Bunny (he IS REAL people) is Roth IRAs. I would be more focused on maxing out your Roth (or establishing one like yesterday) rather then your 401k. If you can do both then more power to you, if you have to sacrifice your 401K to do so then do it.
    But these are just my thoughts….


  4. jim says:

    Thanks for the comments. My Roth’s maxxed out too. 🙂

    My 401K isn’t maxxed (but close), but I find that it’s easier to put a higher percentage at the beginning of the year and pare it back if I find that I’ve been “lucky” with regard to bad money situations.

  5. soe says:


    Found out about your blog via the NY Times article.

    Had a thought about your budget category dilemma when you gave the Cancer Society donation…why not have a budget category for “Giving”? You are a frugal person and are wisely investing your savings. But perhaps you would end up more fulfilled in life if you were also passing on some of your finances to worthy causes on a regular basis.

    My husband and I are committed to a lot of the savings principles you seem to share, but long ago we began giving at least 10% of our income to our church or other charities. We do it out of gratitude to God for what he has given us, but I believe it is a good practice for everyone to give out of what they have been given. I have never heard of ANYONE who has had the practice of giving 10% or more (known as “tithing” in Christian circles) who has ever regretted it. To the contrary, I have heard many stories about how far the remaining 90% has stretched. You have seen that you can “live on less” while contributing to your savings. Why not also experiment with asking God if there are things outside of yourself that you are meant to contribute to on a regular basis?

    That’s my 2 cents as to the Big Picture of your financial life…

    Keep up the good work!

  6. jim says:

    An excellent point and when I learned about the allowance practices of a few other personal finance bloggers (link) I was pleasantly surprised. Charitable giving is something that should be part of everyone’s life and should be instilled at an early age. It’s also important to recognize that you don’t take your bank account to the grave.

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