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January 03, 2012


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Look forward to hearing how things go. A major purchase seems completely justified given your fiscal responsibility. I have a huge oak tree in our backyard that's pretty much dead so I have to get that taken out this year. Should be fun!

GREAT resolutions!! I love that you are still committed to expanding your “gap” even when you have reached beyond millionaire status; that is really a testimate of the habits associated with the millionaire next door. I am excited for you and your family taking a cruise vacation – you have really earned the break! Good reminder to look at the will, I think I will add that to my list as well. I am curious if you are still fully invested in index funds? Do you mind sharing what funds? Now that you have a higher net worth do you plan on investing some of your taxable investments in single stocks or anything else with more risk/reward proposition? Just curious. You should definitely look into starting a LinkedIn account if you would like some quick hits for expanding your network. One of my favorite features on LinkedIn is an option for the service to look at your email addresses to find people for you to connect to. Then it starts suggesting people who are connected to people you are already connected to. Very powerful networking tool. I am just going to be very transparent in saying I have had many job opportunities initiated/facilitated through the site. Worth looking into considering you likely already have a large network that could expand even further with the tool.

I paid off all my debt in 2011. For 2012 I have automated fully funding mine and my wife’s ROTH IRAs with Vanguard. I think it starts this week taking out about $200 each week to fund both of the ROTHs. I also want to have a will drawn up. Lastly I plan on making another real estate purchase.

Cheers and God’s best for the New Year FMF!!!

Nate --

Here's where I have the majority of my investments:

@FMF, Nate: For some or all of the Vanguard funds, the ETFs have equal or lower expenses than the Admiral share class, and can be bought with zero commission/fee in a Vanguard brokerage. Also no requirement to have a $50,000 balance or wait 10 years.

In taxable accounts, Vanguard will also convert mutual funds to ETFs in a manner that does not generate capital gains tax. (The ETF an be treated as just another share class conversion.)

Not sure if ETFs would work for $200 increments such as Nate's, but they work great for larger amounts.

Mark --

For the funds I've linked to above, the minimums are $10k and the expense ratios for Admiral shares and ETFs are identical except for the International Fund -- where the Admiral shares are cheaper.

@Mark: thanks for the comment!! Yes I actually do all of my investing in Vanguard’s no-commission ETFs. I do not own any of their mutual funds – just the corresponding ETFs. You can invest even in 1 share – there are still times when I transfer $40 over to Vanguard and purchase a share right away (if I skipped an expensive meal out or something etc.). I have done this for a while in order to solidify the behavior. Historically I have done my investing in 401Ks but this year my wife and I will max out both ROTH IRAs and we will be investing in the ETFs.

One downside is that it can’t be fully automated. The money will be automatically transferred to my Vanguard money market account. But from there I still must go online and click to make the ETF purchase.

I didn’t even notice that the ETFs had a lower expense – nice tip thanks Mark!!

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