Do you have a Roth IRA? What tips would you give to an investment newbie?

imported_Tomato

Diamond Member
Sep 11, 2002
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Did you go through a broker, or did you do it online? What stocks/bonds are in yours (I think Vanguard looks good?)?

Newbie to investment here, I'm poking through fool.com but am hoping ATOT will have some good advice, too. Thanks!
 

Vortex22

Diamond Member
Sep 6, 2000
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I think it's like a poor man's IRA or something. You're allowed to take all the money out at once to buy your first house or something like that.
 

imported_Strang

Platinum Member
Jan 8, 2001
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I wouldn't mind knowing more about them myself. I've been planning on checking into it for a few months now and haven't gotten around to it.
 

imported_Tomato

Diamond Member
Sep 11, 2002
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Originally posted by: neovan
Does your employer offer a 401(K)? If so, do they match?

Yes, I think they match up to 7% of your salary (you can put in as much as you want). I recently discovered this and started one, but I heard opening a Roth IRA was advantageous as well (especially in preparation for retirement).
 

cchen

Diamond Member
Oct 12, 1999
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I've had mine since I was 18. Its not a poor man's IRA; try to learn a little about something before you start typing.

Anyway, a good reference place is the Fatwallet Finance Forum

They cover literally every single topic related to finance with emphasis on personal finance. You should be able to do all your research there

BTW, Vanguard is the best IRA option according to the guys at FW

Fool.com is a great resource for learning about the basics but FW you can read about other's experiences and recommendations
 

Vortex22

Diamond Member
Sep 6, 2000
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Originally posted by: cchen
Its not a poor man's IRA; try to learn a little about something before you start typing.

No thanks. I'll spread rumor and misinformation as much as I please.
 

oog

Golden Member
Feb 14, 2002
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i opened mine online with vanguard. i think a good index fund is never a bad choice until you have a better idea what you're looking for.
 

neovan

Diamond Member
Mar 8, 2001
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Maximize your 401(k) deductions because it lowers your taxable income and they are tax-deffered. Roth IRAs are advantageous because its earnings are tax-free if you decide to take out a portion of it.
 

cchen

Diamond Member
Oct 12, 1999
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General rule:

1. Contribute up to employer matching limit in 401k
2. Contribute max to roth IRA
3. contribute more to 401k
 

alrocky

Golden Member
Jan 22, 2001
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Visit the Morningstar.com, (Discuss link) and Vanguard for additional information. You can contribute $3000 for your year 2004 Roth IRA and $4000 for you year 2005 Roth IRA. (You have until April 15 2005 to contribute to your year 2004 Roth IRA.) Suggest you get one mutual fund like Vanguard's Total Stock Market Index (VTSMX) or their LifeStrategy Growth (VASGX). The former is an index fund that represents the entire stock market, the latter is a balance fund with an appox. 85/15 stock/bond mix. Even if you don't go with Vanguard, you should seriously consider a total stock market index or balance fund (and one with a low Expense Ratio.) Vanguard charges $10 annually on IRA accounts under $5000, so it makes sense to wait at least until you have $5000 in your first mutual fund before you consider a second fund.
 

dr150

Diamond Member
Sep 18, 2003
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If you earn enough, put the money in a Swiss/Offshore Bank Account and forego the *cough* taxes. ;)
 

Spamela

Diamond Member
Oct 30, 2000
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mine's with Fidelity & it's all mututal funds.

maxing out your 401k first is a good idea,
especially if you have employer matching.
 
Nov 7, 2000
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Roth IRA - pay tax on the money that you deposit (its not pretax like for 401), BUT you dont pay tax on the interest that it earns. in the long run, this can save a LOT of money. i think right now the contributions are capped at 4000 a year. the tax benefits for the roth are of course dependent on not withdrawing the money until a certain age (i forget the details).

i have my roth with fidelity. its an actual account, and then i can choose which mutual funds to invest it in.

 

DaveSimmons

Elite Member
Aug 12, 2001
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Originally posted by: cchen
General rule:
1. Contribute up to employer matching limit in 401k
2. Contribute max to roth IRA
3. contribute more to 401k
Yep, and Vanguard is a great choice. If you check out fool.com or other investment sites, one of the best long-term mutual fund investments is Vanguard's VFINX (S&P 500 index fund).

Setting up your Roth account directly with Vanguard means you can get VFINX without paying the transaction fee that other brokerages will charge you.

(edited to fix forum Quote bug)
 

torpid

Lifer
Sep 14, 2003
11,631
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When I signed up for my 401k, the advisor from lincoln financial said that I should try to get a good balance. So I went crazy with balancing. Now my coworkers are telling me that some of the funds I balanced out will have a withdrawl fee and some won't, and that I should actually only balance out in the ones that don't. I don't remember seeing anything about such a thing on the various sheets on the funds, and as such I am worried that I have acted stupidly.