It’s often argued among personal finance bloggers whether or not you should post your net worth on your blog. Some believe it gives you some sort of “street cred” and allows readers to know that you practice what you preach. Others believe that sort of information is a little too sensitive for everyone to see. Personally, I belong to the second group. My personal finance information is just that… personal. Add to that the fact that my family, friends, and coworkers read this blog… and you can see why I’m a little hesitant.
However, I didn’t want to deprive my loyal (or not so loyal) readers of the excitement that comes with watching the tips, tricks, and advice I jot down each week come to life in a real world example. So, I’ve decided to create the “BeancounterBlog Wish Fund” which will serve as my surrogate net worth meter. With your help, we’ll invest the BeancounterBlog Wish Fund wisely and watch it grow until we’re so rich we begin to live off the interest.
But to begin this little exercise/experiment, I need to set some ground rules. I don’t want to make this example overly-complicated, but I also don’t want to throw the money into an HSBC online savings account and let it accrue interest at 5%. So, here are the guidelines that we’re going to start with:
- Monthly amount available to invest: $1,000. Some might say this is a bit too high, or perhaps not high enough. But this will represent 30% of a $40k after-tax salary, or 20% of a $60k after-tax salary. I realize that it’s VERY difficult to put away 30% of your income… but just roll with me on this one.
- We’re going to begin by using investment options available on Yahoo! Finance. As I mentioned, we’re going to start off simple, by using stocks, bonds, and mutual funds available for tracking on Yahoo! Finance. As the experiment progresses, we’ll throw in a few more complicated investment options and diversify our portfolio a bit more. But as a real world example, this is fairly realistic. Most people sign up with an eTrade or ShareBuilder account and begin making monthly stock purchases because they’re less familiar with mutual funds, bonds, foreign currency, etc.
- Assume broker commissions of $10 per stock trade
- Assume broker commissions of .30% for mutual funds
- Assume dividends are going to be re-invested
So what I need from you right now are ideas for investment opportunities. If you have a favorite stock you want me to invest in, or have a “feeling” about a certain mutual fund… let me know in the comments section below. I’ll be making the final decision by the end of next week, so be sure to add your comments by then.
As this project progresses, we’ll revisit the portfolio often to see what has worked, what hasn’t worked, and why. We’ll also begin to compare return percentages for each type of investment, and compare short-term vs. long-term goals.
So… I’ve got a $1,000 of cash for October, what should I invest in?