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Sister help

April 27th, 2015 at 06:30 am

It's been awhile since I last posted -- I've been tired and busy and chugging along. And I've been reading blogs even though I haven't been posting. Smile

My sister and are are currently helping each other out. She is pretty frugal and a good saver, but not really sure what to do with her money. So she has just been accumulating it in her checking account and letting it sit there. Like for 10 years! She does contribute to her retirement account at work and makes a Roth IRA contribution every year. But other than that, everything was just sitting in one account.

Like I said, she's a great saver, so she'd accumulated a fully-funded emergency fund, a downpayment for a house (she's thinking of buying next year), and more.

Anyway, I finally convinced her to let me come up with a plan for her funds. It was actually really fun, since our finances are pretty automatic at this point. We opened up a high-yield savings account for her EF and downpayment (not super high interest, but better than what she was getting before!) and opened up a taxable investment account at Vanguard.

After opening accounts and moving money around, we also set up automatic transfers for each month, so that her money won't just accumulate in one account again. Since she is a nervous investor, we left a big buffer in her checking account and chose pretty moderate funds to invest in. She seems happy with it, and I think she will stick with it!

In return, she is doing me a favor. She is in great shape and is very good about eating well and exercising. So now every time I eat something, I send her an email. (Thankfully Gmail threads them all together.) It seems to be working so far! Since she is my sister, I am completely honest about what I'm eating, but knowing someone is actually seeing what I eat (as opposed to just writing it down somewhere) is helping me make better choices.

So far it seems like a win-win situation. Smile

3 Responses to “Sister help”

  1. snafu Says:

    Good on you for woking with sister to get her savings onto an investment track. I hope it's ok to suggest you have sister complete the Vanguard risk tolerance questionnaire so that she is comfortable with the gyrations of the market/mutual fund. The Nobel prize winner Sharpe Ratio is highly valued and reported by Research Affliates.com who currently see the real return 'less robust' than the extraordinary results of the past 5 years. Do you believe in a balanced 60/40 portfolio?

  2. snafu Says:

    I'm so sorry, my computer is dropping sentences...so frustrating

    ... It's important to mesh holdings in existing retirement funds & ROTH IRA holdings with the new, taxable portfolio.

    At this point the real return vs market volatility is important to watch [Ms Yellen plans to increase interest rates but time is not yet announced]. The Nobel prize winner Sharpe Ratio is highly valued and reported by Research Affliates.com who currently see the real return 'less robust' than the extraordinary results of the past 5 years. Do you believe in a balanced 60/40 portfolio? ces

  3. creditcardfree Says:

    Sisters are the best for working on goals together.

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