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There have been massive changes to my portfolio this month. I completely changed where my money will be going a couple months ago. I’ve decided to max out my 457(b) rather than contribute to my individual account. Followed by maxing out my Roth IRA and then whatever I have left over will be dumped into my individual account. You can read the post detailing the reasoning behind this change here. Aside from those changes, my individual account has been completely overhauled. I’ve sold the majority of my holdings and invested all of the proceeds into VTI, Vanguard’s total stock market ETF.

For the past few years that I’ve been investing I’ve always had the thought of well, if I cant beat the broad indexes then I’ll just switch over. It takes almost no work to be successful in these types of funds and they perform amazing. Well, the time has come. My portfolio has never beaten the broad index funds, so if you can’t beat them, join them, right? The major downside to this switch is the reduced dividends. I don’t take dividends now anyway, so if my capital is growing at a faster rate then really that’s all that matters currently. I plan to keep somewhere around 80% of my individual account in VTI and allocate the other 20% to DGI stocks.

Now that this isn’t much of a dividend portfolio anymore I plan to revise this monthly post quite a bit. I’ll detail exactly where my money is going between all three of my accounts. I should be able to start contributing to this portfolio again in a few months when I get a raise at work. I did manage to max out my Roth IRA for 2017 this month so that’s one less thing to think about, for now.

For those wondering how I make free trades and pay no commissions, I use Robinhood for my dividend portfolio. If you want to sign up, use my link and we’ll both receive a free stock valued up to $150!

These are all the companies that paid me dividends in February amounting to $159.67.

I received a $5.95 from dividends in my Roth IRA this month.

My dividends year over year in February increased from $105.78 to $159.67. I don’t expect to continue to see much dividend growth year over year with the changes I’ve made to the portfolio.

I received a total of $1,578.94 from dividends in 2017. So far for 2018 I’ve received a  total of $260.86.

My total annual dividends decreased this month from $1,569.22 to $866.38, while my average monthly dividends decreased from $130.77 to $72.70.

 

For those of you reading this post wondering how to get started investing, I have written an ebook that outlines just that. It is called Investing In The Stock Market: The Complete Beginner’s Guide. You can check it out here, or click the picture below.

 

Rental Property: $675

I received $675for rent in February.

 

Here are all my other monthly Dividend Portfolio Updates if you want to catch up!

Leave a comment and let me know how February went for you! I look forward to hearing from all of you every month!

The post Dividend Portfolio Update: February 2018 appeared first on Live Off Dividends.

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This was another awesome month for my net worth. It increased by a total of $7,109. This month gave me some hope of breaking the $200,000 mark by the end of 2018.

For those wondering, I use  Personal Capital to help track my net worth and I highly recommend giving it a shot (it’s completely free). You can link all your accounts and it basically does all the work for you. It also gives you access to a bunch of really cool tools, like the investment checkup tool.

Personal

My home value stayed the same at $105,000. I’m confident I could get more than $105,000 for this house but, I try to value everything conservatively.

My truck value decreased from $6,137 to $6,063. -$74

Total: -$74

Investment Accounts

Robinhood account decreased from $51,998 to $49,978. –$2,020

Roth IRA decreased from $15,984 to $15,424. –$560

457b increased from $9,571 to $9,748. +$177

Total: -$2,403

Cash

My cash increased from $2,981 to $9,771. +$6,790

Total: +$6,790

Business

North Rental is valued at $100,000

East Rental is valued at $100,000

South Rental is valued at $80,000

Cash $6,490

Total: $281,700/2 = $143,245

Total

Total assets increased from $332,521 to $339,229. +$6,708

Mortgage

My mortgage decreased from $58,501 to $58,327.

Total: -$174

Business

North Rental $79,826

East Rental $79,826

South Rental $49,891

Total: $209,543/2 = $104,771

Total

Total liabilities decreased from $163,499 to $163,098. –$401

My net worth heading into March is $176,131 up from $169,022 last month! This was a 4.21% increase! This was a great month for me.

The chart above shows my net worth month to month starting from January 2016. You’ll notice there are some missing months, those are all months that I failed to track. It’s interesting that my net worth remained relatively flat in 2016 until the end of the year, but in 2017 I had steady growth from the time which I diligently began tracking.

The chart above shows my net worth’s year over year growth. I hope to see steady growth continuing 2018.

I failed to track my net worth for a few months last year. Therefore, I don’t have any year over year comparisons. I can say with some degree of certainty, that will never happen again!

I have all my old net worth data dating back to January 2016. As you can see by the chart, I was spotty in recording it. I’ve found that tracking my net worth motivates me even further to increase it. So, I will continue to do so and track the results. Since I’ve began tracking my net worth again I haven’t had a single month where it has went down. Again, I can’t stress enough how valuable it is to track your net worth and Personal Capital is a great tool to help you do so.

Here are the rest of my monthly net worth updates if you want to check them out!

Age

I think it’s important to track my age and where I fall percentage wise in my age group as well. I’m 24 years old and my net worth puts me in the 97th percentile. I finally managed to break into the 97th percentile! That’s a pretty awesome achievement to me. It looks like I’ll be able to break into the 98th percentile before I turn 25! Also, here’s the link that I use to calculate that.

This post may contain affiliate links.

The post Net Worth Update: February 2018 appeared first on Live Off Dividends.

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This was our first real month with the new properties. Everything went smoothly! We had some larger bills that really offset our profit but all in all it was a good month. I wrote a post detailing how we acquired the three houses, closing costs, etc. You can check that out here if you’d like!

Above is my owner occupied property, it is a 2 unit multifamily. I received a property tax relief check in February drastically reducing my tax burden for this month. That was pretty cool. You’ll also notice that my HOI (home owner’s insurance) went up this month.  It went up because I switched insurance companies. My home and auto insurance are bundled together, so while it looks like I’m paying more, I’m actually saving about $500/annually from the decrease in auto. The utility bill is still much higher than I would like it to be and I believe it will start its downward trend for the next few months now that winter is finally starting to back off. I also increased rent from $650 to $675 this month. I paid $60.78 extra toward the principal this month and I plan to increase this amount by $25 (the amount of increased rent) next month and going forward.

For those of you who want to invest in real estate but can’t afford a down payment or don’t want to worry about fixing things when they break RealtyShares may be a good option for you. It is an online investing platform that allows you to invest in commercial and residential properties with a much smaller investment than would be required to purchase real estate out right.

My net income, or lack thereof for my owner occupied this month was -$73.13. It’s usually much higher, but the property tax relief check kept this number very low this month.

 

Above is what I refer to as the East property, it is a 2 unit multifamily. This was our real first month with this property. The sewer bill is due twice per year and of course we had to pay it our first month! You’ll notice a crazy jump from $63.00 to $525.00 in homeowners insurance from January to February. This is because we switched companies and paid in full for the year. It’ll be nice to see a $0.00 in that column for the rest of the year. You’ll also notice that we paid $0.00 in taxes last month. This is because the taxes are not in escrow and no taxes were due last month! No repair bill (misc. expenses) this month which is always nice!

Complaining about being profitable $194.86 in our first month would be foolish, so I won’t do that. But I know next month will be much better!

 

Above is what I refer to as the North property, it is a 3 unit multifamily. The East, North and South property were all purchased at the same time so there’s a lot of similarities. One being, the large jump in homeowner’s insurance. As well as the taxes and the sewer bill. No repairs here last month either, though!

The sewer bill coupled with the full year payment for the homeowner’s insurance just barely allowed this property to be profitable for the month. A mere $12.86. That’s okay because next month will be great!

 

Above is what I refer to as the South property, it is a 2 unit multifamily. Again, the same concerns, HOI, taxes and the sewer bill this month. No repairs!

Given the circumstances I’m content with the $191.78 profit this property provided this month.

This was an alright month but next month should be great! I’m excited to see how we do next month and to share that with you guys. If you guys want to know anything else about the properties or have an questions at all, please leave a comment below! Here are all my previous monthly rental property updates to date if you would like to catch up!

The post Rental Property Update: February 2018 appeared first on Live Off Dividends.

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Passive income is necessary for effective wealth building. I’ve put together a list of 10 different forms of passive income to help you build wealth. I’ve found that some passive income streams work better for certain people than others. It’s up to the individual to find which will work better for their situation as well as their personality.

Disclosure: Some of the links below are affiliate links, meaning at no additional cost to you, I will earn a commission if you click through and make a purchase. Thank you for supporting liveoffdividends.

 

1.) Stock Investments

Investing in certain stocks, ETF’s, index funds and mutual funds will provide you with dividend income. This is my favorite form of passive income because it’s one of the easiest forms.

2.) Real Estate

Owning rental properties or commercial properties can generate rent for you that ideally, will cover all your expenses and provide you with a positive cash flow. Rental properties that are self managed require work from time to time, making it a little less passive. There are property management companies that can make rentals almost 100% passive, at a cost.

You can also invest in real estate without purchasing any property. Realtyshares allows you to invest in real estate with a small amount down.

3.) Start A Business / Buy A Business

Starting a business is probably the ultimate wealth builder. Initially a business will require full time hours but eventually you can hire someone to run your business to make it passive. You also have the option of buying an already existing business in which case you could hire someone to run it immediately.

4.) Start A Blog

Starting a blog is a great way to earn passive income. There are blogs out there that make millions of dollars per year. Blogs generate money through advertisements, affiliates, sponsored posts and more.

If you’re interested in starting a blog support liveoffdividends by signing up for Bluehost webhosting using our link here. You can read our full Bluehost review here.

5.) Write A Book

Writing a book is a very pure form of passive income. Though writing a book is very time consuming, once you publish it, all the work is done. You can publish your book on Amazon and simply collect the profits.

Check out the ebook I wrote called Investing In The Stock Market: The Complete Beginner’s Guide

6.) Peer To Peer Lending

This is a form of passive income in which you invest in loans to other people. There are many different loan options and there is always the chance that the borrower will default. I have yet to try these sites but two of the most popular are Lending Club and Prosper.

7.) Create An Online Course

Designing an online course is similar to writing a book. You put all the work in once and then it’s on autopilot. I’ve seen some very successful online courses.

8.) Create Youtube Videos

I think we’ve all seen some of the successful Youtube content creators out there. These creators make money in various ways including sponsored products and advertisements. Youtube can generate a large amount of passive income if you are able to build a large enough audience.

9.) Rent A Room In Your House

This can take a little upfront work but it can be pretty lucrative. Sites like Airbnb allow you to easily rent out a space in your home for travelers.

10.) Create A Mobile App

Though you may not be a software developer you can still create an app. You can hire out all the programming work to get your app finished. Once finished there’s little involved aside from bug fixes and updates. Apps generally make money through ads and in app purchases.

The post 10 Ways To Earn Passive Income appeared first on Live Off Dividends.

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There have been many changes to 2018 taxes in the recently passed GOP tax reform plan. Most of the tax rates and income thresholds have changed from 2017. Though, there are still seven brackets.

There is a common misconception that if someone crosses into the next tax bracket by even just $1 their entire income will be taxed at the new higher percentage. This isn’t the case. Just the amount earned into the next bracket will be tax at the increased rate. This is also referred to as marginal tax rates.

For this example we’ll assume that someone is a single filer and made $38,701 this year. The top  of the 12% tax bracket is $38,700. They will be taxed $4,453.50 for the $38,700 and then they will pay 22% on anything above $38,700 up to $82,500. So they will pay 22% on the $1.00 amounting to $0.22 for a total of $4453.72. Not 22% of the entire $38,701.

Here are the current tax brackets:

 

The post 2018 Tax Brackets appeared first on Live Off Dividends.

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The average millionaire has seven streams of income, or so “they” say. No one knows who “they” are but this is a concept that is commonly talked about. So what? Well, I’m not sure if this magical seven number is anywhere near accurate but having multiple streams of income is obviously advantageous. Besides, who wants just one stream of income when you can have seven? I’m a firm believer in the power of passive income. The truth is, without it, it’s very difficult to become wealthy in today’s society. A large percentage of the wealthy’s income comes from passive income. Take Warren Buffet for example, he earns about $7,000 per minute from his dividends alone. Per minute!!

Earned Income

There are two ways to get earned income. Either by working for someone who pays you or by running your own business. In other words, income that you actually work for. Earned income is extremely limited by time. You can have multiple earned income streams but you are limited by a 24 hour day and earned income jobs are typically paid by the hour. To earn a decent earned income wage you’re most likely going to need to be full-time somewhere and commit at least 8 hours per day to a single stream of income. This is generally someone’s primary, if not their only stream of income.

Passive Income

Unlike earned income, there are thousands of ways to earn passive income. Passive income is money that you receive with minimal to no work involved. Some popular examples of passive income are owning rental properties, interest, start a website, owning a business, lottery winnings and of course my favorite, income from an investment portfolio. The biggest advantage to passive income streams is that you can be earning income from 10 different streams all at the same time, even while working for your earned income. Passive income is a great way to supplement your regular earned income simply because it’s so hands off and eventually it can even outpace your earned income.

Room For Growth

There’s a good reason why most millionaires have multiple streams of income. Unless you have a very high income or a very high savings rate then achieving millionaire status on a single earned income is nearly impossible. The beauty of passive income is that it generally has a much larger margin for growth. You might get a two or three percent raise at your job each year, which feels great, but chances are it won’t ever amount to enough to make you a millionaire. Things such as stock growth, business growth and appreciation of property can all dramatically increase your net worth. Making it possible for someone with an average earned income to become a millionaire too. In my opinion, creating multiple streams of income, specifically passive income streams, is extremely important to ones financial success. If you could create 3 streams of passive income that earn you an extra $500 per month collectively you would be up  $6,000 per year. If you invested that money for 10 years and earned 6% interest per year that would turn into almost $100,000. That’s a substantial amount of extra money with the possibility of growth and with minimal work involved!

If you haven’t already begun building yourself a passive income stream, what are you waiting for? Get out there and do something that you can look back on in 10 years and thank yourself for!

What is your favorite way to earn passive income?

The post You Need Passive Income To Become Wealthy appeared first on Live Off Dividends.

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This was an incredible month for my net worth. Actually, the best month I’ve ever had. The large increase is due to the recently acquired rental properties. They’re worth much more than we paid for them. I’m really excited to see where this goes this year. I’d love to see it surpass $200,000 this year.

For those wondering, I use  Personal Capital to help track my net worth and I highly recommend giving it a shot (it’s completely free). You can link all your accounts and it basically does all the work for you. It also gives you access to a bunch of really cool tools, like the investment checkup tool.

Personal

My home value increased to $105,000. I’m confident I could get more than $105,000 for this house but, I try to value everything conservatively. +$5,000

My truck value decreased from $7,147 to $6,137. -$1,010

Total: +$3,990

Investment Accounts

Robinhood account increased from $49,700 to $51,998. +$2,298

Roth IRA increased from $15,434 to $15,984. +$550

457b increased from $8,710 to $9,571. +$861

Total: +$3,709

Cash

My cash increased from $9,829 to $2981. -$6,848

Total: -$6,848

Business

North Rental is valued at $100,000

East Rental is valued at $100,000

South Rental is valued at $80,000

Cash $1,700

Total: $281,700/2 = $140,850

Total

Total assets increased from $194,720 to $332,521. +$137,801

Mortgage

My mortgage decreased from $58,649 to $58,501.

Total: -$148

Business

North Rental $80,000

East Rental $80,000

South Rental $50,000

Total: $210,000/2 = $105,000

Total

Total liabilities increased from $58,501 to $163,499 +$104,998

My net worth heading into February is $169,022 up from $136,219 last month! This was a 24.08% increase! This was one of my best months since I’ve began tracking.

The chart above shows my net worth month to month starting from January 2016. You’ll notice there are some missing months, those are all months that I failed to track. It’s interesting that my net worth remained relatively flat in 2016 until the end of the year, but in 2017 I had steady growth from the time which I diligently began tracking.

The chart above shows my net worth’s year over year growth. I hope to see steady growth continuing 2018.

My year over year net worth increased by 110.87%! That is a $88,869 gain from January 2017 to January 2018. I’ve come a long way since January 2016 and I can only hope to keep up this pace.

I have all my old net worth data dating back to January 2016. As you can see by the chart, I was spotty in recording it. I’ve found that tracking my net worth motivates me even further to increase it. So, I will continue to do so and track the results. Since I’ve began tracking my net worth again I haven’t had a single month where it has went down. Again, I can’t stress enough how valuable it is to track your net worth and Personal Capital is a great tool to help you do so.

Here are the rest of my monthly net worth updates if you want to check them out!

Age

I think it’s important to track my age and where I fall percentage wise in my age group as well. I’m 24 years old and my net worth puts me in the 97th percentile. I finally managed to break into the 97th percentile! That’s a pretty awesome achievement to me. It looks like I’ll be able to break into the 98th percentile before I turn 25! Also, here’s the link that I use to calculate that.

This post may contain affiliate links.

The post Net Worth Update: January 2018 appeared first on Live Off Dividends.

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I’m happy to announce that we’ve finally closed on the three rental properties! It took forever and I’m happy that it’s finally over! There isn’t too much information about the three new properties in this post but next month the numbers will start to fill in. I’m excited to share all the new stuff with you guys. I wrote a post detailing how we acquired the houses, closing costs, etc. You can check that out here if you’d like! I didn’t write a rental property post last month, but all the data is included with this one. The last two months have been great with the property, no issues whatsoever!

For 2017, it cost me an average of $215.85 to own/live in this rental property. To me, that’s great. Especially considering that’s less than my taxes would cost me if this house were a single family and not a two family. Having my first year (almost) as a landlord under my belt, I can say that it’s been great. I collected a total of $7,050 in rent so that’s essentially how much I saved vs. if I had bought a single family home. I paid $60.78 additional on the principal this month, as usual. Next month rent will be increased to $675 so I’m going to put that extra $25 towards the principal each month. I may increase the amount I pay towards the principal later on this year, but we’re negotiating a new contract at work so I’m waiting on a pay raise.

For those of you who want to invest in real estate but can’t afford a down payment or don’t want to worry about fixing things when they break RealtyShares may be a good option for you. It is an online investing platform that allows you to invest in commercial and residential properties with a much smaller investment than would be required to purchase real estate out right.

I started writing these posts with the intention of having the three other properties included within a month or twos time. Given that it took forever to close that simply didn’t happen. Going forward these posts should be a lot more interesting seeing as there will be three more properties included. Here are all my previous monthly rental property updates to date if you would like to catch up!

The post Rental Property Update: January 2018 appeared first on Live Off Dividends.

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This will probably be my lowest month for dividends this year. I’m adjusting my investing strategy for 2018. I will be increasing my bi-weekly 457(b) contribution from $200 to $795. This will have a dramatic on this portfolio going forward. I won’t be contributing to this portfolio on a regular schedule for awhile. We’re in negotiations for a new contract at my job so when it’s all settled I will be able to contribute a set amount to this portfolio going forward. You can read the post detailing the reasoning behind this change here.

For those wondering how I make free trades and pay no commissions, I use Robinhood for my dividend portfolio. If you want to sign up, use my link and we’ll both receive a free stock valued up to $150!

These are all the companies that paid me dividends in January amounting to $101.19.

I received a whopping $0.09 from dividends in my Roth IRA this month. It’s almost twice as much as last January at least haha.

My dividends year over year in January increased from $35.58 to $101.19. This was a 184.40% increase year over year. That’s an insane increase.

I received a total of $1,578.94 from dividends in 2017. So far for 2018 I’m just at January’s total which is $101.19.

My total annual dividends increased this month from $1,485.59 to $1,569.22, while my average monthly dividends increased from $123.80 to $130.77. This was a 5.63% increase month to month.

This was a huge month to month increase for average monthly dividends. I wish the increases were this large every month.

For those of you reading this post wondering how to get started investing, I have written an ebook that outlines just that. It is called Investing In The Stock Market: The Complete Beginner’s Guide. You can check it out here, or click the picture below.

Purchases:

MO 10 shares at $70.46 for a total of $704.60. 1/3/18

ADM 8 shares at $39.82 for a total of $318.56. 1/3/18

PEP 4 shares at $116.98 for a total of $467.92. 1/12/18

ADM 13 shares at $43.50 for a total of $565.50. 1/26/18

Sells:

No sells this month.

Contributions:

Total: $880.00

Dividend Increases/Decreases: 5 Increases

Realty Income increased their monthly dividend payout from $0.213 to $0.219 per share. This was a 2.82% increase and will earn me an extra $7.35 annually or $0.61/month.

3M increased their quarterly dividend payout from $1.175 to $1.36 per share. This was a 15.74% increase and will earn me an extra $1.00 annually or $0.08/monthly.

Cincinnati Financial increased their quarterly dividend payout from $0.50 to $0.53 per share. This was a 6.00% increase and will earn me an extra $2.52 annually or $0.21/monthly.

Air Product Chemicals increased their quarterly dividend payout from $0.95 to $1.10 per share. This was a 15.79% increase and will earn me an extra $6.60 annually or $0.55/monthly.

Mastercard increased their quarterly dividend payout from $0.22 to $0.25 per share. This was a 13.64% increase and will earn me an extra $0.36 annually or $0.03/monthly.

Together these increases total to $17.83 annually or $1.48/monthly with no additional capital invested.

This chart shows my average monthly increases from organic dividend growth (growth from companies increasing their dividend rather than growth from additional capital invested ). This was my best month to date with $1.48 in organic growth.

Rental Property: $650

I received $650 for rent in January. I raised the rent starting in February to $675/month so that will be a nice little boost for 2018.

I’m still behind 11 contributions to my dividend portfolio totaling $4,840 from when I was injured at the start of 2017. I also haven’t contributed anything to my Roth IRA for 2017 yet, so that’s another $5,500 that I need to come up with by April. I’m going to try to contribute $5,000 to this portfolio this year depending on when our contract gets finalized.

Here are all my other monthly Dividend Portfolio Updates if you want to catch up!

Leave a comment and let me know how January went for you! I look forward to hearing from all of you every month!

The post Dividend Portfolio Update: January 2018 appeared first on Live Off Dividends.

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I’ve made some huge changes to where my money will be invested this year. This post will explain what I was doing previously, currently and why I decided to make this change.

Starting Point

For most of you reading this you probably know a little bit about my current allocation. For those of you who don’t I’ll explain a little about it. Until February, I was contributing $440 out of my bi-weekly paycheck to my individual brokerage account, which I refer to as my dividend portfolio. I was also contributing $200 out of each bi-weekly paycheck to my 457(b) . 457’s are similar to 401k’s in that the contributions to these employer sponsored plans are pre tax. I also max out my Roth IRA each year but in a more sporadic fashion, but to keep it uniform it would average out to about $211 per paycheck.

New Strategy

My new strategy is dramatically different. I will be putting $0 into my individual account from my paychecks. This will change when I get a raise in July or when we finalize our new contract, whichever comes first. The new contribution won’t be much from just the July raise, but if the new contract goes our way it could end up being a pretty substantial contribution. Much less than $440, though. I will now be contributing $795 from each paycheck into my 457. This is the most that I can put in to reach the maximum of $18,500. My Roth IRA contribution will remain unchanged, it will still be $211 per paycheck.

My Logic

If you compare the two charts you can see that my total paycheck deduction will only be slightly different. In my old strategy I was “paying” $801 to invest $851. This $50 extra is due to the tax advantages of the 457 account. With my new strategy I will be “paying” $807 to invest $1,006. Again, this $199 extra is due to the tax advantages of the 457.

With my new strategy I will essentially be paying $6 more to invest another $155. That’s a difference of $4,030 per year. For this one change I will increase the amount I’ll invest this year by 4 grand! This will also decrease my taxable income. For example, if you made $30,000 per year and you put $10,000 into your 457 plan, you will only have $20,000 of taxable income, before other deductions of course. So making this change will net me $4,030 more this year as well as decrease my taxable income by $18,500!

This seems like a no brainer and it really is. I’ve always been a little apprehensive to make this change for a few reasons.

  1. My employer doesn’t match any of my 457 contributions. That’s a terrible reason not to take advantage of this account and I now see that.
  2. I wasn’t thrilled about the selection of funds that were offered to us. The tax advantages of this account far outweigh the slightly larger expense ratio than say a Vanguard fund.
  3. My take home pay is going to be significantly less. I believe this is still a legitimate concern but, not a reason to ignore these tax advantages. With my old strategy I could simply choose to skip a contribution if I needed some extra money. With the new strategy, I can cut back my 457 contributions but it won’t take effect immediately. This plays into the importance of having an emergency fund.

Another advantage to 457 accounts is that the money is immediately available, penalty free after you separate from your employer. This works out great for those of us working towards early retirement and financial independence. Moral of the story, always question your strategy and make the changes that will benefit you. I think it’s too easy to get stuck in routines and not explore other options. Let me know what you guys think!

Have you guys made any changes going into 2018?

The post My New Investment Allocation appeared first on Live Off Dividends.

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