I'm in debt to my daughter
My 2023 investment allocation review reveals a harsh truth.
I owe my daughter $500.
I’m late in issuing her Christmas bonus.
But, really, I owe Parker much more than that. My debt extends well beyond money. She’s entitled to more of my time, attention and intention.
That’s what an audit of my 2023 asset allocation showed. To me, everything else is secondary.
Parker is the sole reason for this journey. I launched Money Talks because of her. My passion and pursuits will always be about her. Yet my review revealed I must do better putting Parker first.
It’s not the conclusion I anticipated arriving at after my brother Clifton posed a harmless question in the comments online this week. He just wanted to know my total investment allocation amount for 2023 and how it compares to 2022.
I didn’t know the answer but knew that I should have. For as much as I track my finances now, I’m still not as detailed as I should be. You would think my total investment allocation for the previous year would be fresh in my mind in the second week of the New Year. But I had no idea what the number was for 2023.
Because I’ve become purposeful with my money, however, my paper trail made my investment allocation easy to tally.
Excluding my tithe, which is 10% of my annual salary, and my 401(k) contributions, to which I directed 4%, my investment allocation in 2023 was $37,465.85.
Comparing that figure to 2022 is complicated. Prior to September of that year, I wasn’t this mindful about my money. But from September 2022 through the end of that year, I dumped $25,946 into my brokerage account, much of which came from an inheritance. I know that I saved another $4,040 for Parker, which I had done annually for the past several years. That pretty much was the extent of my saving and investing.
My goal now is to increase my investment allocation each year. I’ve said it before and it’s worth repeating. The cheat code in our wealth-building journey is to invest every dollar possible, for as long as possible.
When I reviewed my 2023 allocation, I didn’t love what I saw. Granted, I have a much better understanding of money now than I did two years ago, and I’ve taken major steps to revamp my approach to earning and spending, saving and investing. But I’m still dragging my feet on an important task for Parker.
Here’s a quick breakdown of my 2023 investment allocation:
Roth IRA: $8,875. A portion of this contribution spilled over from the tax year 2022. I was late to adopt this retirement account. I’m now determined to max it out every year.
Freedom fund: $7,505.39. This doesn’t include an additional $9,000 I received as a gift and funneled here. I learned the hard way about not having a solid foundation. One of my primary goals in 2023 was to build my nest egg.
My brokerage account: $6,113. I scaled back in my long-term brokerage account in 2023. I had to fix my foundation and fund business-related expenses.
Parker’s brokerage account: $4,032. Tucking away $336 monthly ensures I hit this number at a minimum each year for Parker. I’m still working on that bonus.
Cash reserves: $10,940.46. Here’s where things get complicated. Money in this account is growing monthly, but it’s not being invested. A portion of it is Parker’s earnings for her role as a partner at Money Talks. And if it’s not being put in her Roth IRA, that’s a problem.
I hit a snag with Parker’s social security card, delaying me from opening a bank account for her as the primary user. It’s the final box I need to check before I can direct her earnings into her Roth IRA. I probably could dump money into her Roth IRA without the additional step. But to steer clear of our nosy Uncle Sam, I’m sifting through the red tape.
I’m kicking myself because putting money into a Roth IRA for Parker has been my plan since the middle of last year. I set up her account months ago. It’s sitting idle, waiting for me to do what I should have done already. Her money is not collecting dividends or compounding. And it’s my fault.
That’s why no matter how much I invest, my accounting is incomplete until I make Parker’s first deposit.
As long as there’s a Roth IRA with her name on it sitting empty, it’s a reminder that I owe my daughter more.
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Cash reserves are important. How would define what the goal of a Freedom fund is?