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Q2 Savings Update For My Trip Around the World

Yesterday was the last day of the second financial quarter of 2007.

More importantly, it was another benchmark date in evaluating my progress toward saving for my upcoming world travels!

According to my savings plan, I was $1,112 short of where I wanted to be as of December 31, 2006.

Six months later, I am excited to be ahead by $1,790.

While I fell far short of my goal for money in the ING Direct high-interest savings account, it was the direct result of a change in strategy.

Early in 2007, I decided to siphon more of my paycheck into purchasing my employer's stock (at a 15% discount).

I've been putting 12% of my post-tax, biweekly pay into that plan, which keeps it safe from my impetuous spending habits.

As a result, I saw a $2,902 net gain, despite assuming the cost of an unforeseen dental implant.

It would've been more, had my employer's stock price not dropped $5/share in the past month.

As a result of some investor confidence issues, the share price has become more volatile, and I do not see that changing in the latter half of the year.

I am trying to decide whether I should cash out my shares now, and be happy with the concrete 15% return (and accept the higher capital gains tax), or let it ride (and potentially pay less in taxes, and earn a higher return, though risk a lower one all the same).

I am leaning toward cashing out so I can put the money in my ING account and start earning interest, which would negate my expected tax liability.

I would also worry a lot less in the coming months.

Planning a trip? Go Backpacking recommends:

Shirley

Thursday 5th of July 2007

Try emigrantdirect.com for savings...it works like ING, but has higher rate of return. I guess it's sort of too late for you to start now since you are planning to leave soon...but just for future reference. I've been using Emigrant now for about a year and can definitely see the difference when compared to ING.

Shirley

Thursday 5th of July 2007

Try emigrantdirect.com for savings...it works like ING, but has higher rate of return. I guess it's sort of too late for you to start now since you are planning to leave soon...but just for future reference. I've been using Emigrant now for about a year and can definitely see the difference when compared to ING.

Cassie

Monday 2nd of July 2007

If I'm doing the math right and extrapolating your variables correctly, you are going to wind up paying 15% capital gains tax, correct? Assuming that this is short term.

If thats the case, and you aren't going to qualifty for the long term rate by holding on any more, I'd say pull it and put it in your high yeild savings. Given that your trip is coming up, and you can't pull money out of your arse that you need, I'd be leary about risking it this late in the game. If your stock loses even 10% right now, depending on how much you have in there, it could really impact your trip. While 5% isn't flashy, at least its dependable.

Thats just my cheap .02c.

Dave

Monday 2nd of July 2007

Yep, I'll end up paying the higher capital gains tax on most of the gains (which really won't work out to be too much of a difference anyways).

My Dad's advice over the weekend was to sell it if I'm going to end up worrying about it (which is obviously the case). I'm going to sell it now, and not second guess myself if the price goes up.

Thanks for the feedback!

Cassie

Monday 2nd of July 2007

If I'm doing the math right and extrapolating your variables correctly, you are going to wind up paying 15% capital gains tax, correct? Assuming that this is short term.

If thats the case, and you aren't going to qualifty for the long term rate by holding on any more, I'd say pull it and put it in your high yeild savings. Given that your trip is coming up, and you can't pull money out of your arse that you need, I'd be leary about risking it this late in the game. If your stock loses even 10% right now, depending on how much you have in there, it could really impact your trip. While 5% isn't flashy, at least its dependable.

Thats just my cheap .02c.

Dave

Monday 2nd of July 2007

Yep, I'll end up paying the higher capital gains tax on most of the gains (which really won't work out to be too much of a difference anyways).

My Dad's advice over the weekend was to sell it if I'm going to end up worrying about it (which is obviously the case). I'm going to sell it now, and not second guess myself if the price goes up.

Thanks for the feedback!

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