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November 29, 2007


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J Baba --

If you're looking for your question, I unpublished it (and the response with it) as it was off topic. I'll re-post it the week of December 10 and you can look for answers then/there.

Her achievements are admirable but her emergency savings account is lacking severely.

She should have at the very least a couple of grand in there before attempting to get a Roth IRA. Why not simply put more into the probably employer matched 401K versus starting the IRA? Maybe she was maxed but I highly doubt it.

Anyway, aside from that blunder she did an amazing job. I will be doing the same starting in January for a twelve month experiment. Everyone around me thinks I am crazy.

So I am crazy and getting wealthier by the day. :)

The Bob - She can always pull money out of the Roth if need be!

If she really needs the money, she can tap the principal of her Roth. As long as she doesn't touch earnings, it will come out tax-free. Not the best route, but a possibility.

Bob - what exactly is your experiment? I'm curious.

She has earned $360 in her savings and CD accounts. I assume these could be used for emergency use. Even at a good 5% yield, that means her emergency savings is at $7200. That seems like a good number in relation to her 21K salary. I have a long long way to go to get that kingd of ratio.

Gah, if she increased her income $3,675.77 a year then she didn't make 21K, she made 24,675.77.

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