Taking The Investing Leap in 2012

Toward the end of 2011, I started planning my investments for 2012. Instead of investing over a long period of time, I let my money sit in my savings account because I didn’t want to pay taxes on my earnings. I was planning too much and not taking enough action.

My plan was to wait until 2012, and then invest the money in a Roth 401(k) (details about that coming in a future post) through my LLC. I was sitting on cash because I hadn’t been willing to invest it, and it was finally time to cash in.

The only problem, was that I wouldn’t exactly be liquidating my savings account, at least not for the long-term. Sure, the balance would drop, but I’m going to be replenishing it in 2012, and soon I’d be sitting on another pile of cash with no real plan.

I wanted to do all my investing in a Roth IRA, but the truth is that with $5,000 limits (and income limits that can prevent you from investing in a Roth IRA), I was going to have to join the rest of America and invest in a taxable account.

So I had to adjust my plan. There’s no day like today to start investing, so now I’m taking the plunge. And since I plan on making money from my day job and my side hustles in 2012, I’ll be using that money for the Roth 401(k). I won’t be able to make one lump deposit, but I will be smarter this year and invest every month (or quarter) so that I don’t end 2012 with cash that could have been making me money the entire year.

I believe that stocks will do really well in the long term and I want my money invested when the market skyrockets. However, that’s impossible if I sit on my cash and wait for the perfect investing conditions. Most of the time, doing something is far better than doing nothing. I finally took the leap, and I promise to be better in the future!

Readers, how dumb am I for waiting until 2012 to invest? Is it hard to part with the money in your bank and invest it?

5 Responses to Taking The Investing Leap in 2012

  1. Bethy @ Credit Karma says:

    I’d say yes, for me, it is difficult to part with the cash in my bank account to invest. I’m also planning on investing in 2012 (I mean investing other than my 401(k)). I’m interested to hear about your journey and hope it motivates me to get started!

  2. I think it’s good to invest, but is it the right time? The market had been on a tear since January, can it keep going up? This is why I’m always nervous about investing a lump sum. You never know what is going to happen next.

    • Daniel says:

      @Joe @ Retire By 40, I definitely don’t like doing a lump sum all at once for that reason. But if the market is going up, maybe waiting will cost me!

      In the long-term, I don’t think I will consider this such a big lump-sum payment that it can significantly change my overall returns. So I guess I’ll be diving in head first!

  3. krantcents says:

    I could never time the market, so I dollar cost average into it in good and bad times.

  4. why gas prices are skyrocketing says:

    Are you looking to invest into passive income? Dividends are a great way to go about that as they pay over and over again.

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