CNNMoney.com: Do it now

CNNMoney.com: Do it now

A great article on some areas for improvement in your financial life. One of my main goals for the early part of 2006 is #10 on this list: craft a long-term investing plan.

I have a decent handle on our family finances, but there is a lot of room for improvement, especially in the retirement basket area. I feel pretty good about the security basket.
The dream basket is totally invested for the short-term right now (1-24 month time frame). We use it mainly for family vacation funds. I'd like to set some mid-term and long-term goals in this area, but nothing major comes to mind. I thoroughly enjoy using these funds for making family memories.

Great Interest Rates on Savings Accounts

I've been a huge fan of ING Direct for several years. That's where I keep my emergency cash reserve (security basket). I also put our dream basket money there every month. I like the ability to set up multiple accounts and log in and see them all from a single interface. I also like the ability to add and remove automatic deposits at will. The ability to automate everything is a crucial component to our financial plan.

Though I'm a loyal ING fan, I've been tempted by some great rates at other banks. Here are some of the most recent rates I've seen:

ING Direct: 3.8%
EmigrantDirect.com: 4.0%
hsbcdirect.com: 4.25%

There are others, but these are the ones that caught my eye. A great rate is not enough. Great customer service and quality of the company both factor into the equation.

So, in the interest of earning more interest, I'm going to do a test and see how these companies stack up to ING. The bar is set pretty high. I'm interested to see how they fare.

Best Online Broker

Scottrade
This company wins the award in my book. I've used a company that was purchased by Ameritrade (can't remember the name), Ameritrade, and now Scottrade. I love these guys!

Top 5 Reasons I Love Scottrade
1. $7 commissions
2. No inactive account fees
3. No account maintenance fees
4. Only $500 required to open an account
5. Super friendly customer services folks

Ameritrade is not very friendly for the buy-and-hold investor. An inactive account fee is levied during each quarter in which you do not place a trade. That is the primary reason I left Ameritrade.

Apparently Ameritrade is planning to acquire TD Waterhouse. I don't know how that will shake out, but I'm sure the two companies combined will be a force to be reckoned with.

I have not used ETrade at all. I hear positive things about them, but Scottrade was a better fit for me right now.

My Retirement Basket

Currently, my retirement basket is made up of the following accounts:

• 401k at my work (John Hancock Pensions)
• Rollover IRA from my previous employers' 401k accounts (Scottrade brokerage account)
• Traditional IRA for me (American Funds)
• Roth IRA for my wife (T. Rowe Price)
• SIMPLE plan from the company my wife owns (T. Rowe Price)
• Regular brokerage account (Lincoln Financial Advisors)

We regularly contribute to the 401k, SIMPLE plan, and brokerage account. We'll begin contributing to the IRAs in 2006. The rollover account is essentially a holding place for any old 401k money.

In all honesty, things aren't very balanced in these baskets. I'm not an expert on asset allocation, however one of my goals for 2006 is to figure out a better way to manage these accounts and find some balance.

I'm contributing 15% of my gross income to this basket. Ultimately I'd like to be at 20%. My wife laughs at this since 10% use to be enough. As soon as we achieved that goal, I wanted to bump it to 15%. Now that we are there, I'd like to bump it to 20%. She jokes that what I really want is to put 80% into this basket, buy some Ramen noodles with the rest of it, and live in a single-wide trailer. I tell her not to give me any ideas...