To keep things even, we put the exact same amount of money in the accounts at the exact same times (except the first contribution…I had already put $1,650 into a traditional IRA in 2014 before we decided to do this, so I’m starting out with a handicap).
Obviously we can either add funds incrementally throughout the year, or just do it all in one single contribution.
We agreed on the single contribution. I’m not sure it matters much, but the fewer number of contributions, the easier it is to track our performance against the market as well as against each other.
It also gives us flexibility to vary the timing and size of the positions we buy into, i.e. if we just did like $1,375/per quarter, I’ll bet we would end up just picking one stock every three months, and paying max commission as a percentage of the purchase (CapitalOne charges $6.95 per trade, which is right at my 0.5% threshold).
So we fund them all at once…in August.
Why August? Because historically, September is the worst month in terms of average market performance, (although August is a close second). No seriously. This is a thing.
So if you’re going to make one contribution per year…when should you make it? I would argue that right around or just before the statistically worst months of the year is a pretty good time to have an account full of cash…right?
Okay, so maybe this is a little crazy. Thou can’t time the market so thou shalt not try to, etc. etc.
Whatever. The point is, it’s that time of the year! As of today the Roth IRAs are fully funded for 2016!
This doesn’t change the bottom line total of the wet worth tracker, but it does move some cash around. You’ll notice “The War Chest” account has been pretty much drained from where it was at the beginning of the month, and the Roth accounts are flush with cash.
Now we just need some volatility to create buying opportunities…