Way back when, in the summer of 2001, my husband reenlisted in the military. His job rate allowed him to receive a bonus payment for doing so and neither of us had ever experienced having that much money all at once. We didn’t blow it on toys, clothes, movies or anything like that ~ we put about half of it in Roth IRA’s. Half of the half for him and the other half for me. The other half was used to pay off credit cards (I am looking forward to finally stopping this trend!) and buying much needed baby items.
We also made a few mistakes with those IRAs. The first being – we went to a well known company (not named because I’m not sure I can? Probably, but I won’t take any chances). I’m not sure why we did that – did someone we know recommend them? I really don’t remember. But I remember being hugely pregnant (due in about six weeks from the meeting with the guy) and sitting in a office, listening to him explain IRAs and money markets and such. I remember being annoyed at having to be there by myself and wondering if this was the right place to be.

We ended up with the two IRAs and a money market account ~ and with little knowledge of investing.

Then 9/11 happened and our IRAs were suddenly worth a lot less – and our money market account even less then that. It was sickening. We weren’t sure what to do – we didn’t know who to turn to and our advisor at the company merely said don’t worry and leave the money alone.

After a few months of leaving the money there, we started using the money in the money market account. We had checks and debit cards attached to it so it was easy. We left $13.05 in the account in the end. And we left the IRAs alone for years.

Finally we transferred those IRAs to a bank and didn’t look back. At the same time of the transfer, we received a letter from the company we started out with and a check for $13.05. The letter said something along the lines of thanks for the business but they were closing the account and sending us what was left. I thought that was nice of them – at least we got what was left over! – and figured they would do that considering we weren’t putting any money into the accounts anymore, even the IRAs.

My advice is this – don’t go to a big name investment firm unless you have A LOT of money to work with. We still have our IRAs and are going to re-start the contributions soon and that $13 has long been spent. My lesson from this is just that ~ start with someone you know and trust, and not just because the name on the door is big. We are also going to open up 529 accounts for our kids ~ but learning from our mistake, we aren’t looking for a huge sign on a door.

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This entry was posted on Thursday, January 18th, 2007 at 11:11 pm and is filed under Military Money, Money Mistakes, Saving. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.