I'm 18 years old - why should I start a Roth IRA?

[amnesiac]

Err.. do yourself a favor and don't take investment advice from people without credentials to back themselves up.

"Put it all in stocks."

WTF?

There's a billion and one things you can do with your money, and not one person here can tell you what to do with it unless they do a full-on investigation as to your current financial status, goals, and investment ability.

I'm taking my Series 6 and 63 this Friday so everything's still fresh in my head, and even with that it's a crapshoot telling you what to do unless we know exactly how much money you can invest when and where, and what your ultimate investment goals are.

FWIW, stocks are probably NOT the way to go.

 

[Hector13]

Originally posted by: amnesiac
Err.. do yourself a favor and don't take investment advice from people without credentials to back themselves up.

"Put it all in stocks."

WTF?

...

FWIW, stocks are probably NOT the way to go.

100% stocks probably doesn't make sense for anyone, but stocks should defintely be a large part of your investments. Espcially if you are young. Since you probably don't have a house or anything else, stocks should be somewhere around 60-70% of your investment funds (in my opinion). The longer your investment horizon, the more attractive stocks should be (all of this assumes long-term trends in the markets continue, but hey, you have to assume something.

 

[bbkat]

Originally posted by: Toasthead
because you want to retire someday?

and social security will only be found in history books by then

 

[jmcoreymv]

What would be a good company to open up a Roth IRA with? Is citibank, wells fargo, or ameritrade good?

 

[wyvrn]

I took these also a couple of years ago, along with Group One health and life. This is a great way to learn the basic investment options. Really anyone can study for and take these exams in their spare time, and you probably learn more that way than reading most books or attending most seminars. I highly recommend it to anyone that wants to learn the basics of investing 🙂

Originally posted by: amnesiac
Err.. do yourself a favor and don't take investment advice from people without credentials to back themselves up.

"Put it all in stocks."

WTF?

There's a billion and one things you can do with your money, and not one person here can tell you what to do with it unless they do a full-on investigation as to your current financial status, goals, and investment ability.

I'm taking my Series 6 and 63 this Friday so everything's still fresh in my head, and even with that it's a crapshoot telling you what to do unless we know exactly how much money you can invest when and where, and what your ultimate investment goals are.

FWIW, stocks are probably NOT the way to go.

 

[Nato595]

I'm 20, I started my IRA last year @ $60.00/check.
You never lose money, my employer matches what I put in, so for every $60 that I put in I get $120.
Plus with my plan you can take out the money (penalty free) for a downpayment on a house, other wise you have to wait for many many years to take it out without being taxed up the ass.

 

[dquan97]

I started mine when I was 18...

 

[Hector13]

Originally posted by: Nato595
I'm 20, I started my IRA last year @ $60.00/check.
You never lose money, my employer matches what I put in, so for every $60 that I put in I get $120.
Plus with my plan you can take out the money (penalty free) for a downpayment on a house, other wise you have to wait for many many years to take it out without being taxed up the ass.

are you sure that was an IRA? I didn't know employeers could match funds in an IRA (as opposed to a 401K).

 

[gopunk]

Originally posted by: Hector13

Originally posted by: Nato595
I'm 20, I started my IRA last year @ $60.00/check.
You never lose money, my employer matches what I put in, so for every $60 that I put in I get $120.
Plus with my plan you can take out the money (penalty free) for a downpayment on a house, other wise you have to wait for many many years to take it out without being taxed up the ass.

are you sure that was an IRA? I didn't know employeers could match funds in an IRA (as opposed to a 401K).

and fwiw, you can take up to 10k out for your "first" house for any roth ira. "first" because the irs' definition of "first" is really lax.

 

[gopunk]

Originally posted by: jmcoreymv
What would be a good company to open up a Roth IRA with? Is citibank, wells fargo, or ameritrade good?

i like ameritrade... i use them for my roth ira and my normal trading account. never used the others.

 

[KEV1N]

Originally posted by: Skoorb
Best financial advice in the world: Do not carry credit card debt month to month.

Maybe this was a misconception of mine, but I always understood that carrying over a small (manageable) balance was a good way to build credit.

 

Originally posted by: KEV1N

Originally posted by: Skoorb
Best financial advice in the world: Do not carry credit card debt month to month.

Maybe this was a misconception of mine, but I always understood that carrying over a small (manageable) balance was a good way to build credit.

As far as I know, having a credit card and using it is a good way to build credit. It's NEVER helpful to carry a balance. Why LOSE money in interest charges in order to build credit? Doesn't make sense to me.

 

[KEV1N]

Originally posted by: jumpr

Originally posted by: KEV1N

Originally posted by: Skoorb
Best financial advice in the world: Do not carry credit card debt month to month.

Maybe this was a misconception of mine, but I always understood that carrying over a small (manageable) balance was a good way to build credit.

As far as I know, having a credit card and using it is a good way to build credit. It's NEVER helpful to carry a balance. Why LOSE money in interest charges in order to build credit? Doesn't make sense to me.

I have heard that carrying a balance and (this is key) eventually paying it off is better than paying off the entire balance each month. Reason being, you are possibly deemed more financially trustworthy (the whole concept of credit) if you actually borrow some amount of money for a period and pay it back rather than constantly pay the entire balance. You will have proven that you are trustworthy. I found this explanation reasonable.

Also I have heard that there is a field in the credit report model that states the "largest balance carried over". I imagine a large value for this field, coupled with a "account paid off" field, is a good thing.

 

[Hector13]

Originally posted by: KEV1N
I have heard that carrying a balance and (this is key) eventually paying it off is better than paying off the entire balance each month. Reason being, you are possibly deemed more financially trustworthy (the whole concept of credit) if you actually borrow some amount of money for a period and pay it back rather than constantly pay the entire balance. You will have proven that you are trustworthy. I found this explanation reasonable.

Also I have heard that there is a field in the credit report model that states the "largest balance carried over". I imagine a large value for this field, coupled with a "account paid off" field, is a good thing.

I can't believe that this would make you more "trustworthy". If you ask me, the only reason the cc company would prefer this is because it means they are making more money off of you.

 

[tontod]

I pay my 2 credit cards off fully every month, and I have been building credit gradually. So, you dont need to carry a small balance every month to build up credit.

 

Originally posted by: KEV1N

Originally posted by: jumpr

Originally posted by: KEV1N

Originally posted by: Skoorb
Best financial advice in the world: Do not carry credit card debt month to month.

Maybe this was a misconception of mine, but I always understood that carrying over a small (manageable) balance was a good way to build credit.

As far as I know, having a credit card and using it is a good way to build credit. It's NEVER helpful to carry a balance. Why LOSE money in interest charges in order to build credit? Doesn't make sense to me.

I have heard that carrying a balance and (this is key) eventually paying it off is better than paying off the entire balance each month. Reason being, you are possibly deemed more financially trustworthy (the whole concept of credit) if you actually borrow some amount of money for a period and pay it back rather than constantly pay the entire balance. You will have proven that you are trustworthy. I found this explanation reasonable.

Also I have heard that there is a field in the credit report model that states the "largest balance carried over". I imagine a large value for this field, coupled with a "account paid off" field, is a good thing.

My point is, why would I spend money to improve my credit score? It's counterintuitive. I make a point of paying off my balance every month, and I'm not going to start paying needless interest charges to AMEX just so my credit score goes up a few points. It just doesn't make sense to me why anyone would feel the need to accrue interest charges just to improve their credit score.

 

[TJN23]

i started a Roth IRA with Ameritrade with $500 last summer...When I turn 21 I will be able to get my hands on roughly $1500 from a savings account....I just find it hard putting the maximum $3000 contribution in per year...

i'm turning 21 and am a full time student...

I also have roughly $900 in American Funds A Growth (AGTHX) but have invested a total of about $1450 into it....that is more for long term however...

 

[EXman]

Don't ask for financial advice on a computer forum.

good advice

 

Does anyone know who I should talk to at BankOne about a Roth IRA? Should I call, or is it better to go in and speak to a financial person about it?

 

[teckmaster]

its never to early to start up a fund for retirement nowadays. I have had a retirement fund set up through work since I was 19. I work for a school, so when I retire, they contribute and the state contributes. I'm also starting a Roth IRA within the next month for added money when those wonderful golden years come about. I personally am going to and would recommend everyone to max out your Roth IRA every year if possible. Right now they are set at $3,500 per year, but a friend who is into accounting said that could be going up soon to $5,000.

 

[FeathersMcGraw]

Originally posted by: teckmaster
I personally am going to and would recommend everyone to max out your Roth IRA every year if possible. Right now they are set at $3,500 per year, but a friend who is into accounting said that could be going up soon to $5,000.

For tax year 2002, the maximum Roth IRA contribution was $3500 if you were over 50, $3000 otherwise (assuming you didn't hit the income caps). The contribution limit increases to $4000 in 2005, and $5000 in 2008 (I assume those dates are tax years).