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  • Writer's pictureNick Heil

Payday Friday 12/18/2020 and My Roth IRA Update

Updated: Dec 22, 2020

Happy Friday everyone! Not just any Friday, though, but payday Friday at that(at least for me and I presume a lot of Americans).

Today was another good financial day, or should I say, a financially progressive day.

This was the last paycheck I will receive in the dreaded year of 2020, but with this final paycheck I wrap up some great goals that I set at the beginning of the year.

With today's contribution to my Vanguard Roth IRA I have officially maxed out my Roth IRA for the year. As of this writing, the annual max is $6,000 of contributions. At the beginning of 2020, I set out to max out my IRA through steady and consistent contributions throughout the year.

My savings rate (currently over 50% of my income) would allow me to max out my IRA much sooner in the year, but I choose to steadily contribute the minimum I can each paycheck throughout the year so I end up maxing out the IRA at the end of the year.

I choose to do it this way because I have a high confidence level in staying disciplined enough to do this over the course of the year. I also do this because I invest my money into other things. Currently those other things include:

  • my Vanguard taxable investment accounts

  • my portable self storage business, Boxit-N-Lockit LLC

  • my rental property business, MyShack Properties LLC

  • and now my investment property business with my brother, Heil Brothers LLC

  • my Coinbase account where I have a small amount invested in Bitcoin

  • my pension through my government job as the Business Manager of The City of Corry

  • my house.

How I invested the final contribution of the year

My last Roth IRA contribution of the year totaled $230 to get me to $6,000 of contributions for the year. I used that $230, plus the $230 I invested from my last paycheck, to purchase 1 share of the Vanguard Information Technology ETF (VGT) at an executed price of $350.24 and the Vanguard Real Estate Index Fund (VGSLX) for a total of 0.9130 shares at $109.90.

At the end of the day, the value of my Roth IRA finished at $8,100.12 and the total value of my Vanguard investment portfolio finished at $156,886.08.

I plan to continue purchasing VGT and VGSLX for the foreseeable future, but sometime in the latter part of 1Q 2021 I will likely start contributing to another Vanguard investment product that I haven't decided on yet.

My strategy is to pick three to five Vanguard ETF's and or mutual funds to form the core of my IRA that I will plan to dollar cost average into over the next 30 plus years and provide you guys with monthly updates.

Once I have established my core holdings I will likely allocate 90% of my bi-weekly contributions to dollar cost averaging into each of those core holdings and will use the remaining 10% to invest in individual securities.

How I invested my final paycheck of the year

In my job as a business manager, my annual salary as of this writing is $62,894. I make a good amount more than this once you factor in my businesses and my investments, but when I think of my savings rate I like to think in terms of my work salary only.

Since I'm paid on a bi-weekly basis, my salary of $62,894 translated to a net paycheck after taxes and my pension contribution of $1,766.74. Out of that net paycheck I invested as follows:

  • $230 to my Roth IRA as I already shared with you above

  • $550 to my portable self storage business, Boxit-N-Lockit

  • $145.14 to my pension account (this was actually taken out of my gross paycheck, but I still count it towards my investment contributions so I can keep track of it)

That equates to a total of $925.14 and an effective savings rate of 52.36%.

How are you investing your final paycheck of the year? Be sure to let me know in the comments below or reach out on social!



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