Looking back, I can’t say that I was intentionally lying — I really did feel like I was debt free — but I lacked perspective. It didn’t take me long to realize that I was deluding myself.

So, yeah, four months to pay off my car and my computer and sundry other loans, but three years to pay off the whole thing. Now all I have left is the mortgage!

[...] As always I was perusing my favorite personal finance blog (and likely the most popular on the net, from where I’m sitting), and came across a great post about how building your financial portfolio properly is very similar to building a house. [...]

[...] Get Rich Slowly – Building A Financial Future [...]

Kudos and keep up the great work.

Grant

You’ve made great progress, but don’t let starting to invest be intimidating. It’s MUCH easier than I imagined before I started.

1) If the company you work for has a 401K (403B/457 for non-profit/gov’t), use it. For every $100 you contribute, your paycheck will only be reduced $60-70.

2) Open a Roth IRA or IRA. It’s incredibly easy through Fidelity, Vanguard, or T. Rowe Price. To start, use their simple S&P Index 500 fund, or a target date fund, depending on your age. I’ve always had excellent help over the phone from Fidelity. Love ‘em!

If you WANT to make it more complicated, you can. Choose a bunch of different mutual funds, compare returns and costs, make sure you’re properly diversified, rebalance every 6-12 months, etc. But you don’t have to. You can always make it more complicated as you learn more. But DON’T wait to understand every last detail of the investment world.

-Daniel

Excellent point! We are not all assembled the same way – what motivates me is way different than what motivates my wife. I’ve figured me out and I’ve spent the last 25 years trying to figure her out.

Best Wishes,
D4L

It also fits quite nicely since not everyone has the same needs or desires, whether in housing or finance.

[...] debt burden for a lot of folks. To address that, I recommend reading JD’s recent article on The Architecture of Personal Finance. In addition to being a well-thought-out article, it also has some great links in it. JD’s [...]

I absolutely agree with you that we have to find what works for us. I just became dept free except for my mortgage on 12/21! I basically used Dave’s plan but tweaked it a bit. My last two depts (student loan – 6% and personal line of credit – 11%) I transferred to credit cards that offered 0% interest for the first year. I dumped large payments on those while building my savings. Since the balance on the cards were not earning interest and I was not charging anything on them, I felt comfortable building my savings at the same time. I wouldn’t have recommended the above method to myself five years ago because mentally, I would not have been able to follow through. I would have probably charged on the cards and pay slightly above the minimum.

Now, I’m almost ready for the next phase…investment. Honestly, I don’t know where to start. I think I’m supposed to invest in mutual funds and I’ve read and read about them but I still feel totally in the dark. So, I’m going to take a look at some of the books suggested above and see if any of them shed any light. If anyone has any ideas (maybe a website or book that breaks investment down so a fifth grader can understand ), I’m open for advice.

Happy holidays

As long as you stick to the basic rules of saving (spend less than you earn) and low cost diversified investing you will do quite well.

Mike