Bank error in your favor

STIPIMM: “(What’s So Funny About) Peace, Love and Understanding,” by Elvis Costello

The nascent McKenzie household has faced a number of financial woes since August. Of course, if you’ve read any of my whining about it lately, then you know all about it. We’re actually not that bad off though; Bridget’s loan money has provided a bit of cushion in the post-H&R Block days, and I will be getting a nice chunk of bonus from them in a couple of weeks. So we’re not eating Ramen noodles yet, and we’re confident that things will pick up.

But it is true, we have been living paycheck to paycheck, and it has been rough at times. In all this, though, there has been one bright light, one that has little present-day impact, but has added to our Net Worth in Quicken and given me something to do other than look at all the debt we have piled up. When Bridget and I got married in August, she unwittingly brought a sizable dowry with her in the form of a 401(k) pension from her last employer in D.C.

Now, when I say sizable, different people will have different ideas of what that means. Well, it’s not chicken scratch, but it certainly isn’t gargantuan; I mean, Bridget was there for five years and didn’t contribute a dime to it, so you know it can only be so big. But, since she was there for five years, the money that the company put into her fund is fully vested to her. And since her troth is my troth and all that... ka-ching!

We found out about it... nay, I found out about it when we got a quarterly statement from the fund company with details about her holdings. I didn’t quite understand at first what it all meant – I had a similar arrangement with the first company I worked for in Oklahoma, but since I had only worked there for two years, none of it was vested, and it was gone when I left, so I figured this was the same. But no, there was that line saying that it was 100% vested, and so, well, it was all hers... um... ours.

This was a boon, but an inconsequential one. First off, we couldn’t touch the money right now even if we wanted to. Well, I suppose we could touch some of it, but the tax and penalties would make it very not worth it. And second, it really isn’t that darn much, so what would be the point? As far as Bridget and I are concerned, this money is almost like Monopoly money right now. It’s just there theoretically and someday, in 30+ years, it might matter.

But since it is an investment account, that means we get to be investors! Suddenly, Bridget and I are players on the seas of international finance! Yes, our stake on that sea amounts to little more than a life-preserver, but it’s still something. Most importantly to a financial nerd like me, it gives me a chance to move the Monopoly money around into different investment accounts.

Because Bridget knew nothing little about the fund before I filled her in on it, it was fully invested in the default safe, low-yield trust fund account that the company had. I only know so much about 401(k)s and mutual funds, but I know enough to know that young folk like us are advised to put a fair chunk of their money in higher-yield accounts that can endure the long-term ups and downs of the market. And so, the first thing I did after getting online access to the fund, was to move them into “growth funds.”

In doing so, I got to learn about one part of Quicken that I had never used before: investment portfolios! I can track the daily progress of our investments there with cool graphs and charts, which show how much Monopoly money we’ve gained or lost.

Of course, as any day trader will tell you, watching the progress of your money can get addictive. Fortunately, these funds only update once a day, so it’s not as though I can sit at the computer constantly hitting Update watching the minute-by-minute fluctuations. But you can bet that most evenings, after the markets have closed, Chris goes into Quicken to get the daily quotes.

Lately, however, the evening quotes have me wondering if Bridget and I have invested in Baltic and Mediterranean. The past week since all the funds have been put in different higher-risk accounts have seen steady declines in the funds. But even losses are kind of fun for this financial geek; Quicken gives you detailed lists of exactly how much Monopoly money you’ve lost or gained. Kind of cathartic in a strange way.

But either way, to both Bridget and I (especially Bridget), the money’s not really there in the first place, except as a theoretical entity. So all this doesn’t really matter; but in 30 years, it would be better if this nest egg had been fruitful and multiplied instead of being run into the ground. We shall see...