My Newest Venture: Index Funds

I'm hoping to start putting a small amount of money -- say, $15-20 a paycheck -- toward a Roth IRA and invest it in an index fund. My current investments have really taught me the art of tolerance; the markets went up and my stock funds went from $1000 to $1400 in just a few months. Then the market went down, and my stocks -- mostly in solar and renewable energies -- also plunged, finally stopping at $605. I was feeling a bit panicky, and wishing I hadn't followed the advice of financial magazines (and really, I shouldn't have -- I was picking my stocks on P/E ratios, but there were a couple "big performers" that the magazines were touting, so I bought them -- and lost big.)

However, when I looked over my purchases, I decided that only one stock was an "unknown." It was stock I had bought for sentimental reasons without really scrutinizing the business practices of the company (it was near my hometown). So, I cut it loose. It was a good thing, because the stock has continued to drop, and I lost relatively little.

My stocks just surged back up to $825, and from this I've learned: thou shalt not check the stocks every day. I trust the companies I've invested in and so long as they don't go under, I know the stocks will eventually perform.

Now I am beginning to research the much-touted index funds. I've discovered the Vanguard 500, and today I saw this article on a new Vanguard Index fund that follows mid- and large-cap companies in the FTSE All-World Index. I'm also trying to follow and understand securities. At some point, I'd like to take a class; I never learned anything about finance either in high school, college, or now, having gone through most of a master's degree. It's kind of an adventure, really, except that I feel pretty stupid a lot. So I'll be posting more about Index Funds as time goes on, as well as continuing to discuss debt paydowns.

Congrats to Budgeting Babe

Congrats to Budgeting Babe, who aired in this piece on CBS:

Net Worth for March

As predicted, we have a positive move on our net worth for this month, going from $39,686 to 44,050, which is an increase of $4,364 for this month. This is almost entirely due to the paydown of our credit cards; we are down to a single card now.

This month we should have a positive increase also, as we continue to save and pay down our cards, but this summer we'll have to really tighten our belts.