My 401(k) is now in the TRIPLE digits!!
Oh, yea. You read that right, this big saver now has more than 100 dollars in her 401(k) account. Gosh, I can almost see retirement from here!
I know. You’re impressed.
In all seriousness, I did do something pretty big this week.
First, a little backstory.
If you aren’t aware, the power of compound interest is pretty fantastic. Not only do you earn interest on the original principal amount, but you earn interest on the interest. The longer it compounds, the more amazing your money becomes. Dee over at Color Me Frugal posted a great table last week about how the magic can be harnessed for retirement savings by utilizing different contribution strategies. Check it out! You’ll probably increase your savings contribution.
When I was 15, a substitute teacher deviated from the lesson plan and gave a short but impressively persuasive lesson about this investment potential goodness. I’m not sure how many of my classmates “got it” but it sunk in with me. Shortly thereafter, I started my first investment account with a good chunk of my life savings.
Last August, I consolidated my checking and savings accounts to 2 banks, down from 4. One of the savings accounts I closed had almost exactly $5,500 in it. $5,500 just happens to be the maximum amount one can contribute to a Roth IRA. After hearing so much about Roths, I felt this was a sign that now was the time to start my very own. In one deposit, it was fully funded.
And then I forgot about it.
I haven’t contributed to either account since the initial deposit. Nothing!
Zip! Zero! Zilch! Not a dime.
All the growth in both accounts is purely from the market. While it’s fun to look at the balances and see the clear line between my contribution and the current value, I’m not maximizing the potential of either account.
So this week, for the first time ever, I re-contributed.
It’s not much, but I added a cool $100 to my Roth IRA. Then I adjusted my budget to allow for a greater contribution in the future. After a month or two of budgeting success, I plan to set up an automatic transfer.
It felt so responsible and so good!
I’ll figure out how to access the other investment account another day. I can only handle so much excellence at once.
Have you neglected an investment account?