Family Mutual Funds 2
Ended midway through 12th year on May 10, 2013
History: For Christmas, 2000, a new family mutual fund gift was made to each family member. The old family mutual fund (FMF1) requires $500 a month in contributions. The new family mutual fund (FMF2) is more modest; it requires only a $250 initial contribution plus $100 a month in contributions ($25 per family member x 4).
Rules: Funds must be selected from TIAA-CREF mutual funds. Rule change [5/30/02]. Funds may be selected from any fund family with a $500 minimum purchase that will allow a $25/mo or $50 every other month additional investment. Rule change [12/24/04]. Family vote to liquidate investments in TIAA-CREF for poor performance. TIAA-CREF sales occurred May 20, 2005. New funds chosen in order of standings (poorest picks first.) Family members must remain fully invested at all times (cannot go to cash) in mutual funds (cannot own individual stocks). No two family members can own the same fund at the same time. First come, first choice. Initial contribution of $250 per fund and $25 per month in contributions is covered by gift. Rule change [12/25/08]. The entire annual contribution of $300 per family member is to be invested all at once, rather than at $25 a month or $50 every two months. Monies may be spent by a family member at any time, which ends the gift. There is no matching savings account for comparison purposes. After a divorce in August, 2010, the actual values of "Mom" and "Dad" were replaced with cash placeholders which receive the $300 annual contribution but do not earn interest.
Termination: At a meeting in early May, 2013, a mutual decision was made to end the FMF2 exercise. The reason? Participants concluded that after 12 years of investing at $25/month representing a total investment of $4150 per person (through December, 2013), total values of slightly over $5800 for the two best performers did not justify the time and energy expended. In other words, for purposes of building wealth, the verdict on the FMF2 exercise is "you can't get there from here." While partipants were free to spend the accumulated money however desired, both daughters indicated their holdings would be used to fund their next Roth IRA contribution ($5000 per year). For final values, go here.
Current values of FMF2 (is dollar cost averaging working?)
Contribution schedule (future)
Past values (year end 2001 - ):
Recent values:
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