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Home > December 2012 - The procrastinator finally moves

December 2012 - The procrastinator finally moves

January 12th, 2013 at 08:38 pm

Cash & Savings: $81,046 => $71,804 (-12.29%)
Foreign Currency: $34,884 => $35,948 (3.05%)
Domestic Brokerage: $176,400 => $167,737 (-4.91%)
International Brokerage: $176,044 => $208,875 (18.65%)
401(k): $91,400 => $94,394 (3.28%)
IRA: $97,752 => $34,633 (-64.57%)
Roth IRA: $13,047 => $80,986 (520.73%)
Total Assets: $670,573 => $693,657 (3.44%)

I made quite a few moves in December that led to the wild swing among certain categories. The biggest move I made is moving about $65,000 from my rollover IRA to my Roth IRA. This will add $23,000 to taxes comes this April but still within the 34% tax bracket I’m in. As another reader Snafu pointed out last month, if I sell everything in my rollover IRA and taxable accounts then it will take me into the next tax bracket, which is not something I can afford (and a dumb move). I also spoke to someone at Fidelity, my main brokerage firm, and he advised me to move about $10,000 from rollover IRA to Roth IRA annually so minimize the tax impact.

I also sold some shares from my biggest holdings but it will take a few years for me to unwind all my positions so I don’t jump into a higher tax bracket.
The other big financial decision I made is buying a new car – it’s a used car, but new compare to the other car I owned since 1998. I’m calling it my midlife crisis car because it’s a convertible. Knowing I will own it for more than 3 years I decided to pay it off in cash instead of leasing it and paying interest. My cash position will drop significantly in the first quarter of 2013.

Overall, I’m glad I made those decisions because they are probably something I should have done 2-3 years ago but later better than never. The next immediate task is bringing my emergency fund to a higher level of $25,000. That would be enough to cover a year of expenses living comfortably.

Posted in Uncategorized | 4 Comments »

4 Responses to “December 2012 - The procrastinator finally moves”

  1. twest Says:
    January 12th, 2013 at 08:49 pm 1358023798
    1358023798

    Glad you were able to get the car. Good Luck with the emergency fund.

  2. FrugalTexan75 Says:
    January 12th, 2013 at 09:59 pm 1358027974
    1358027974

    Have fun with your new car. Smile

  3. Jerry Says:
    January 21st, 2013 at 09:01 am 1358758866
    1358758866

    I like the way you think about boosting that EF. There is nothing like having the insurance of a cushion like that, it leads to much more peace of mind. Congrats on the wheels!
    Jerry

  4. Easy Cloud Says:
    February 3rd, 2013 at 05:54 am 1359870861
    1359870861

    Thanks, guys! I really like the car but it is truely a weekend car since I'm still driving my old Camry to and from airport during the week (no reason to park my new car there) then work from home on Friday so Saturday and Sunday are the only time I have the chance to use it. I think I'm putting less than 100 miles on it each week.

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