Traditional Rollover IRA – $8,914.80 (-7.67)
My Roth IRA – $26,538.91 (+1.36%)
Wife Roth IRA – $14,259.01 (+0.50%)
Current Traditional 401k – $30,536.53 (+1.71%)

Roth/Traditional % = 50.84% (tax free)

Total Retirement Nest Egg $80,249.25 (+0.25%)

Traditional Rollover IRA – $9,655.62 (+2.28%)
My Roth IRA – $26,182.21 (-1.23%)
Wife Roth IRA – $14,189.15 (+1.84%)
Current Traditional 401k – $30,023.11 (+9.50%)

Roth/Traditional % = 50.43% (tax free)

Total Retirement Nest Egg $80,050.09 (+3.56%)

One thing I will mention in this months report is that I pretty much have all but abandoned making my $100,000 by Age 30 goal. It was within my grasp, but I made a conscious decision late last year to start saving up for a new house and that has trumped my retirement saving here in the short-term. I still will come close by my 30ths birthday ($90k+), but am afraid I will not actually meet my original goal and I am ok with that.

Anyway here is the report.

Traditional Rollover IRA – $9,440.31 (+15.79%)
My Roth IRA – $ 26,509.50 (+22.32%)
Wife Roth IRA – $13,932.31 (+18.91%)
Current Traditional 401k – $27,418.91 (+13.32%)

Roth/Traditional % = 52.32% (tax free)

Total Retirement Nest Egg $77,301.03 (+17.56%)

Traditional Rollover IRA – $8,152.87 (+16.41%)
My Roth IRA – $21,687.83 (+17.29%)
Wife Roth IRA – $11,717.15 (+17.97%)
Current Traditional 401k – $24,195.47 (+21.77%)

Roth/Traditional % = 50.80% (tax free)

Total Retirement Nest Egg $65,753.32 (+18.91%)

I am currently actively saving for a house my wife and I want to build in the next few years. I have about $20,000 saved up at ING Direct and am adding to it at a rate of about $1,000 per month. I have been a happy ING Direct customer for a number of years and I think everything about their service is top notch and I have never had a problem with them. The only issue is they have been slashing their interest rates at a torrid pace the last few months (as has everyone else).

Normally the difference in interest rates between ING and their competitors is usually pretty negligible where I feel the ease of use of the ING Direct’s site outweighs the few extra bucks I would get in interest. This time however I am accumulating a pretty significant cash savings and as it currently stands SmartyPig’s interest rate is currently double that of ING Direct. So I’ve decided to make the switch for now.

Now SmartyPig and ING Direct certainly aren’t apples to apples. ING Direct is a pretty standard savings account and certainly has a lot more flexibility than SmartyPig. For those of you that don’t know SmartyPig is a goal oriented savings bank where you can’t just deposit and withdraw funds as you please (at least not if you follow the intention of their user interface).

In order to have an account at SmartyPig you have to setup a savings goal. So you enter in an amount you want to save and when you want to reach the goal by and it calculates a monthly contribution that is automatically withdrawn from your checking account once each month. Interest accrues daily, but it is only credited to your account quarterly. In order to withdraw your money you have to close your savings goal and then you can withdraw the money to your checking account via ACH, receive a Debit Card with the balance, or a gift card for the retailer of your choice. Deposits to and from SmartyPig take 3 days before they post to your account, which I believe is 1 day longer than they take at ING Direct. For those of you that are wondering, SmartyPig is FDIC insured and they partner with West Bank to store your money, so you have that peace of mind.

Now granted all of the nuances with SmartyPig may turn some people away, but here are a few ways around their interface that could allow things to work a little more like a traditional savings account. SmartyPig has a minimum goal of $250. So you just setup a goal for $250 and just make a $250 initial deposit. At this point your goal should be reached so it will not require any automatic monthly deposits. Interest keeps accruing on completed goals and you can add money at anytime to a completed goal. Then simply deposit money as you would your normal savings account. About the only drawback is when you want to withdraw money you have to withdraw the entire amount.

I’ll admit even with these workaround SmartyPig may be too rigid for a lot of users, but for my situation where I will only be depositing and likely withdrawing all at once it is not a big deal to me. I setup a trial account with them last July after receiving a SmartyPig gift card and that made me comfortable enough to make this switch. Currently the rate difference alone if all things stay equal will result in $320 extra in interest a year and like I said I am depositing about $1000 a month so the interest difference is enough for me to make the change.

Now granted SmartyPig could and very likely will lower their interest rate on their accounts as well, but they have enough of a cushion right now and seem to be cutting rates slower than the competition so I feel comfortable with the switch for now. If SmartyPig slashes rates and gets anywhere near the ING Direct range – I will simply close my savings goal and go back to ING.

What do you think? For me right now their interest rate makes this a no-brainer in my situation. Am I overlooking something major as right now this seems a little too good to be true given the interest rate environment out there right now.

Of course I’m not alone as I’m pretty much just keeping on track with the market and even guys like Warren Buffett have faired just as bad or even worse. The great news though is that I’m young and I don’t need this money for the next 30 years so while it’s somewhat depressing to see your saving and hard work go up in flames in the short term the odds are in my favor that long term I am still very much headed in the right direction.

Anyway here are this months results.

Traditional Rollover IRA – $7,003.59 (-4.68%)
My Roth IRA – $18,490.95 (-12.13%)
Wife Roth IRA – $9,932.34 (-12.59%)
Current Traditional 401k – $19,868.59 (-1.51%)

Roth/Traditional % = 51.40% (tax free)

Total Retirement Nest Egg $55,295.47 (-7.73%)

Here are the figures for this month – if things keep going the way they are our new house fund might surpass our retirement nestegg!

Traditional Rollover IRA – $7,347.80 (-10.94%)
My Roth IRA – $21,043.66 (-11.74%)
Wife Roth IRA – $11,362.75 (-12.21%)
Current Traditional 401k – $20,173.86 (-14.30%)

Roth/Traditional % = 54.08% (tax free)

Total Retirement Nest Egg $59,928.07 (-12.61%)

Dear Zecco Trading client,

I’m writing to tell you that as of March 1st, 2009, we’re increasing the minimum level of assets needed to earn 10 free trades per month to $25,000. We’re also adding a new way to get free trades: customers who make at least 25 total trades per month will also qualify for 10 free stock trades per month.

Now I understand some of the reasons for the need for them to switch their cost structure with interest rates being as low as they are, companies cutting advertising, less money being invested, etc, but to be honest if you don’t have a $25,000 balance with Zecco there is no reason to stay a customer with them, and even then you should seriously question whether Zecco is the best place for your money.

I’ve been a customer of theirs for about a year now and I have 3 trading accounts with them (two IRA and one taxable). There have been a number of occasions where I was going to write a pretty nasty review of their trading platform and customer service, but never got around to it and after all I figured you get what you pay for and for $0 per trade I figured I could put up with a lot of the hokey issues you deal with when you are a customer of Zecco.

Granted they have improved a number of items such as the website constantly throwing errors and puking on itself, but you still have to deal with the fact that your account balances and money available for trading are just plain wrong on a consistent basis. One day (during the days of “Which bank/financial institution is going to fail today?”) a good portion of their customers logged in to see their equity balance, cash balance, etc all sitting at $0.00. Needless to say you could not get through to their customer service over the phone because the lines were overloaded and any attempts by customers to post messages on their message boards asking what was going on were promptly deleted by Zecco staff.

Zecco has a habit of cherry picking posts it leaves on its message boards, any posts that reflect negatively on Zecco or question some of their practices are deleted by their staff. Which is the last thing you as a customer want to see when major issues like none of your investment money or cash show up in your account and you can’t get a straight answer from anyone at Zecco. I’d be surprised if this post is still there when I publish this, but here is a thread on Zecco with people complaining about Zecco deleting posts that put them in a negative light.

The issue that caused the $0 account balances is a recurring event. The cash and equity balances are not updated real-time like they are at every other brokerage I have ever used, they are done nightly via a batch job and this batch job often fails or just screws everything up. Every weekend my money available for trading is greater than it should be. It always seems to forget about any limit orders you have in the queue on the weekend and says your money available for trading is whatever cash you have and does not subtract this open limit orders. This allows you to put in orders for more money than you have cash for (which if you make regular deposits and don’t trade that often and don’t know what the balance should be is quite dangerous). Currently my Roth IRA account should have trading power of $7.04, but instead it shows $407.04 and will let me put in an additional order for that amount even though I currently have an open limit order for 10 shares of Chipotle at $40.

To make it worse this happens on my two IRA accounts and when I called Zecco to complain after I noticed a negative trading balance after the nightly batch job got the balance right the following Monday, I asked what would have happened if I would not have caught this and I would have purchased stock with money I didn’t have? Their response was it would have been treated as trading on a margin and I would have been charged interest. So apparently with Zecco if you fall victim to this bug or I guess exploit it you can trade on a margin with a retirement account! I called in on this error last July and have followed up at least 3 other times and it still has not been resolved.

There are quite a few other less serious nuisances that you put up with, but in the end I always justified it with my 10 free trades so even though I don’t trade that often it allowed me to dollar cost average into stocks and not have to worry about my money going to brokerage fees. Essentially I could put up with the annual $30 IRA fee, wrong balances, and overall just a bad website as long as I was saving money.

Now that the $0 trades are gone (granted one of my accounts is usually over $25k, but as of right now its not) Zecco has put themselves on a fairly even playing field with most of the other discount brokers such as TradeKing, Scottrade, Etrade, etc that provide professional working websites and respectable customer service and IMHO no one in their right mind should be a customer of Zecco when any of those other options are available for roughly the same cost.

I don’t want to come off as just being a big baby and I’m just saying this because I’m whining about Zecco removing my free trades. My experience with Zecco has been a pretty poor one from the start and even with the $0 free trades I had twice queued up scathing reviews of Zecco for this blog, but just never put the effort to finish them. Now that the free trades are gone it just motivated me to do a public service and warn of just some of the issue with Zecco so that none of my readers accidentally signed up with them over another brokerage because their commission is still relatively cheap (trust me its not worth the hassle).

One thing that I want to start preparing for is upping my credit score to get it as high as possible to make sure that I would qualify for the best rates. My credit score is not bad by any means, but I want to do everything in my power to get it as high as possible.

One item that I thought might be affecting my credit score is that my wife and I throw every possible purchase each month on our credit card in order to earn rewards points. This makes us about $50 a month in rewards. We pay the balance off in full each month, but I usually set the payment to hit about 2 days before the due date, because I like the feeling of using their money for free as long as possible.

The problem is, whenever I run a credit report on myself it looks like I always have a $1000-$2000 balance on the card because the payment doesn’t process until the middle of the following month. So even though I’ve never left a balance on a credit card in my life I look just like any other credit card junkie that does not pay off their balance each month.

I am assuming the credit card companies report balance information at the end of each month so I figured if I just paid the card off in full before the end of each month this should help my credit score. In the past I’ve always hesitated from paying it off before the statement came out because I worried I would not get credit for my rewards points, but I’m pretty sure this is not the case and will try it out.

Thoughts on this? Does anyone know when the credit cards report balances to the credit agencies?

The whole idea of this goal was to make sure that I was in a good situation in regards to my retirement planning. You can go ahead and read the original post here, but idea was to give myself an aggressive savings goal that would have me well on my way in my retirement planning. You can see where I currently stand vs my original plan below.

As you can see I’m actually a little ahead of schedule and I have a pretty good chance of achieving my goal by my birthday in August and won’t need the whole calendar year like I originally thought I would. I have $12,636 to go and assuming I keep my job for the rest of the year I should be able to commit ~$1500 a month needed to meet my goal.

The whole idea with this goal was that by having $100k invested before I was 30 I would have a great jump start on my retirement and could let the power of time and compound interest work their magic. Then at that point in time I could sort of put things on cruise control or if I were to choose to start putting that money towards another cause that was important to me (kids education, new house, vacations, etc) and it would not jeopardize my retirement.

With the market the way it is now I think I would be stupid to stop investing after I reached my goal and no matter what I will always contribute a pretty good chunk of my salary into investments, but I do have another immediate goal and that is to start aggressively saving for a new house and my own full court basketball court. So once I get to my $100k by age 30 goal I will probably cut my retirement contributions in half in the short-term to help fund the new house fund.

Regardless this goal and this blog have been vital tools for me to keep me on the right track financially and I can’t recommend enough for those of you who are planning your future to put your goals down on paper/web page somewhere and revisit them on a regular basis. It has been pretty amazing what I’ve been able to accomplish (I never thought I had a chance at this goal) and I know this goal and this blog played a vital role in it.