2017 Capital Gains Investing

When I refer to Capital Gains Investing, I include anything that appreciates in value. A few examples are stocks, mutual funds or ETFs, currencies, collectibles, gold, and real estate (only if I plan to sell). Depending on the investment, I plan to hold them anywhere between a few weeks to 20-30 years.

To set expectations, I am terrible at picking individual stocks and timing the market. Because of that, I spend the least amount of my time analyzing my investment accounts and charts. Also at times I’ll be presented opportunities for retail arbitrage deals but I tend not to focus too much of my energy towards them.

♦ Strategy: automate contributions and deposit one off lump sums at times when I can afford to just watch them (hopefully) grow long term (20-30 years).

♦ Goal: to build a security blanket for retirement, my kid’s college education, and increase general savings. But I view all of these accounts as something I hope never to need as I will mainly focus on Cash Flow Investing.

♦ Target: To reach $2.2 million through automated deposits and capital gains from investment appreciation. Read about the details in our article on Retirement Planning  and College Savings Strategy.

2017 YTD Performance 2017 year to date Capital gains performance

As of July 2017,  I’ve been pacing well credited to the strong market but as you can imagine being up 10% will not get me to financial freedom anytime soon. For reference, I am using Personal Capital to aggregate all my accounts and track performance.

Goal Tracking

Capital gains pacing towards retirement goal

Current Accounts

♦ 401k: With my personality I like knowing that I’ll be receiving a baseline paycheck each month and a W2 at the end of the year. I see tremendous benefits working in a corporate environment. I max my contributions each year eligible.

Our target is to fund the account till retirement

♦ Traditional & Roth IRA: My wife and I currently max out our IRA contributions each year and contribute into them before all other account. Between the two, the Roth IRA is most appealing to us since unlike the traditional we will not be forced to make withdrawals at 70½. We view the Roth as our emergency fund if we need a large amount at once so we don’t get hit with the high tax that year.

Our target is to fund the account till retirement

♦ 529 Plan: We opened our 529 plan when my wife was pregnant. We hope to pay for our kids’ full tuition. We deposit $100 weekly into this account and deposit all cash gifts my son receives into the account.

Our target is to fund the account $100,000 (for each child)

♦ Taxable Investment Account: We deposit into this account when we have extra cash to invest. We invest in index funds and just a handful of companies we think will survive the next 20-30 years. This account is used to build our net worth and for real estate investment opportunities.

Our target is to fund the account till $500,000

♦ HSA Account: We are putting in $5,250 and receiving $1,500 from my firm to contribute the max of $6,750. Having a high deductible plan while our son is only 1 was definitely a risk since we didn’t know what to expect for medical expenses. But I’ll write a post mid-year with an update on how this decision is trending.

Our target is to fund the account till retirement

♦ Forex Account: I’ve dabbled into currencies when the market crashed in ’08. I understood the importance of diversifying my cash backed by countries other than the United States at that time. Currently we only have a small amount in money outside USD. We view the account as a hedge in case the dollar crashes.

Our target is to fund the account till $100,000

♦ Gold: A newer investment vehicle for my family and also another hedge in case the dollar crashes. With some additional cash available we started investing in gold last year. We didn’t purchase a lot but will consider potentially purchasing in small increments each year.

Our target is to fund the account till $50,000

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