Radio Shack 401(k) Enrollment: Denied!
I tried to enroll in my Radio Shack 401(k) today, only to find out that I must be with the company for a full year (despite the fact that I had six prior years of service with the company) to enroll in the 401(k). It's no major crisis, really, except that I was hoping to get the company matching benefits from the 401(k) as quickly as possible. So for now I will just have to enjoy the tax-free growth of my Roth IRA and try to pump as much of my paycheck as I can into the Roth IRA in hopes of maxing out the IRA for the 2007 tax year.
Speaking of the Roth IRA, I just contributed $330 within the past two weeks or so, which should finally bring the account to over $2000. My portfolio is still equally split between four Exchange Traded Funds (SPY, IWM, EFA, and PEY). For you new readers out there in blogland, I recommend exposure to three main areas in your long-term investment portfolios: a broad market index like the S&P 500 Index, a small cap index like the Russell 2000 Index, and a foreign market index such as that covered by EFA in my own portfolio.
Roughly equal exposure to these three investment areas will ensure that your portfolio is adequately diversified and balanced for long-term growth. I also added a dividend paying fund (PEY) to my portfolio, which I am partial to because of the compounding power of regular dividends, but you could just as easily leave this out of your own portfolio and you would be in very good shape with a solid long-term investment strategy in place with only three funds in your whole portfolio.
At the risk of sounding redundant to my long-time readers, remember not to get too creative with your portfolio. Find a good, basic, long-term investment strategy and stick to it. Take a fraction of your income and put it into your Roth IRA every time you get paid (hopefully in addition to your company's 401(k) if you are eligible to participate), and maintain a very basic diversified portfolio of Exchange Traded Funds (ETFs) or Mutual Funds from the three basic areas referred to above.
If you follow this strategy, you will be rich when you retire. The earlier you start, the richer you will be, due to the mathematical power of compounding. So stay the course, troops, and let me know about your progress in the comments section. I would love to hear your personal finance and investing success stories!
