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IRA Update: Which Account is In The Lead?

by J. Money on Tuesday, September 6, 2011

ultimate ira testWhat up what up!  I know it hasn’t been all too long since I announced the Ultimate IRA Test the other month, but some of y’all have been asking about it, and honestly I’d be just as curious too ;)  I’d be lying if I said I don’t check it every day to see who’s winning the race! Haha…

For those who missed it – I decided to convert my $180k worth of 401(k) money right into Traditional IRAs.  Originally I had planned to drop it all into 1 account (to make it nice and easy), but after talking w/ USAA reps, and getting asked 101 questions as to *how* to invest it, I decided to just do ALL of them and see what happens.  With the notion of picking the BEST one after a year (was gonna be 6 months – but y’all made a good point that it’s not enough to truly test it out).

I know it’s a bit extreme/crazy, but then again it’s not like I can really go wrong here anyways.  Each of the routes are perfectly fine investment choices, some just have higher fees than others, and invest in different like-minded funds.  So really, I’d be okay with dumping my money in *either* of them.  I just can’t make up my mind, and figured I’d put them all to the test and have them prove that they’re the true champions ;) Haha…  at the very least it gets me excited and learning!

Okay, so after almost 7 weeks, here is where each account stands:

IRA #1 (Not Managed) $55,354.30
IRA #2 (USAA Managed, their funds only) $55,243.33
IRA #3 (USAA Managed, ALL funds) $56,033.99

$15,000 off from initial investment due to the economy, but comparing the accounts side-by-side what do you think?  Is this what you would have guessed?  I had my money on IRA #1, personally. I thought buying and sitting on ‘em would beat out all of options :)  2nd place isn’t too bad, but then again it’s only been a month and a half.  I’m SUPER surprised #3 is in the lead for sure.  That’s a big difference there for sure. Maybe not in the grand scheme of things (it’s what, a 1% lead?) but comparing side to side like that it’s def. the current winner.

Something else to consider is the fees to keep these guys running.  #3 may be in the lead right now, but it also has the highest %!  Probably not enough to knock it down into 2nd or 3rd place (not in the mood to calculate right now), but it’s still something to keep in mind.  And which is the reason why it was hard for me to make the huge decision in the beginning anyways ;)  I don’t know which is better in the long run??  I could research and make a better informed guess, but at the end of the day I learn much faster by PUTTING IT into real-life action. That’s enough for me to go on in this stage of life (aka 30-40+ years from “retirement”).

All being said though, please don’t take this as advice to follow suit :)  This may be perfectly fine for ME to test out, and go a bit extreme with here, but it def. doesn’t mean it’s good for you all.  I tend to take on more risk, and I’m okay with the crazy ups and downs. If all this stuff makes you queasy, stay far far away! Haha… there are plenty of other ways to test out theories than going “all in” like this.

We’ll see what happens going forward though.  Make sure to place your bets now!  We’re only into month 2 of this 12 month race, and I have a feeling it hasn’t even gotten interesting yet ;)


{ 11 comments… read them below or add one }

1 Brian September 6, 2011 at 8:45 am

Hopefully once the markets take a chill pill all of our investments will hop into the northbound lane again. I don’t have enough dough to get a managed account with USAA, but I’m really curious to see how they perform throughout the year.

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2 20's Finances September 6, 2011 at 9:34 am

Interesting idea. I am just reading about this IRA test for the first time. I am very interested to see how it ends up since I will be opening up another IRA in the next year.

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3 Beth September 6, 2011 at 9:50 am

Wow…. that was both slightly insane and pretty awesome at the same time. a magic combination!
I am busting my hump to get to the point where I can start and contribute to my own personal retirement, and there are waaaaaaaaaaaaaay too many options for my brain to keep it all straight. That, and I have absolutely no trust for any financial “products” until I have concluded my own research to my own satisfaction. Money: I don’t have too much right now (working to improve that slowly but surely), so I really don’t enjoy the idea of wasting any.
Thanks for putting yours on the line and letting us know the results!

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4 Financial Success For Young Adults September 6, 2011 at 12:19 pm

This is a pretty cool test. Those are all unrealized losses I’m assuming so you could potentially see 1 and 2 come back. I’m still only invested in a Roth IRA and a few personal stock accounts. I’ve gotta get my 401k going assp.

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5 Jenna, Adaptu Community Manager September 6, 2011 at 1:31 pm

Thanks for the update. Glad to see all your funds are doing well.

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6 Jen @ Master the Art of Saving September 6, 2011 at 5:28 pm

This is going to be a very fun series, I love it already. :-) I don’t mean you losing 15k, just the experiment.

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7 Brian September 6, 2011 at 9:24 pm

This is unrelated, but out of boredom I looked up Budgets are Sexy in the Wayback machine. Everything is still in your archives but looking up a date and seeing what you posted, and that your net worth was still in the 60K range. It’s crazy how things change in a few short years.

http://web.archive.org/web/20080314193442/http://www.budgetsaresexy.com/

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8 J. Money September 7, 2011 at 2:23 am

@Brian – You and me both! haha… what do you need to get started? $50k? when you hit it let me know and we’ll contrast that one in too w/the game ;)
@20′s Finances – Thanks man, I don’t think it could realy go TOO wrong here since each option is a viable one really, at least in my books.
@Beth – Haha, sure thing. We all start out somewhere, my friend! I remember when I had a Net Worth of like $500 :) Though back then I never even tracked it, so I could have been way off in my head, haha… (actually, that was one of the reasons I DID start tracking it – so I *knew* 100% what my deal was. no more guessing!)
@Financial Success For Young Adults – Oh yeah, either of these accounts could easily take over at any time, I have no idea what to expect except for best guesses. I def. miss my 401k plan w/ all that free matching (!!!), but these will have to do for now. DEF get on it and at least put in what your company is giving you for free! :)
@Jenna, Adaptu Community Manager – They’re actually not doing well, but it’s all good ;)
@Jen @ Master the Art of Saving – Haha, I know. It keeps me entertained and somewhat happy either way ;) I know it’ll go back up in the future, just a matter of time, baby.
@Brian – WOWWWWW, that is crazy! $60k net worth! I remember that time so vividly too – esp those blog posts that are at the top of the site :) Seems like forever ago, and yesterday, at the same time. And oddly I feel just as secure w/ money back then as I do now? Weird, huh?

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9 Ashley @ Money Talks September 7, 2011 at 1:08 pm

Shoot… I’m voting for #1 to be the winner. I’m surprised at the results too. It will be interesting to watch over time.

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10 Jenna, Adaptu Community Manager September 7, 2011 at 1:58 pm

@J.Money – It’s better than nothing!

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11 J. Money September 10, 2011 at 4:58 pm

Yeah, originally I was voting on #1 too :) We’ll see what happens.

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