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10-23-2005, 12:48 PM
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#1
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Confused about dryer sheets
Join Date: Oct 2005
Posts: 2
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Roth IRA
Hi,
I was thinking about opening a Roth IRA and depositing $100 every month for next twenty or thirty years or so (I'm 19). I was wondering if this is a better idea than a traditional IRA. I'm 19, my paycheck is just under $800 a month, but my expenses are low (tuition is paid for by scholarships, housing paid by scholarships and grants, recently took myself off car insurance and gave my mother my car so no expenses there, i really just buy food every month and pay for utiilities). Anyways... I'm thusly in a lower income bracket and believe I will continue in a lower income bracket (I hope to teach high school english).
Is a Roth IRA best for me?
How do I go about opening one, and where is best?
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10-23-2005, 01:10 PM
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#2
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Moderator Emeritus
Join Date: Feb 2005
Location: San Diego
Posts: 5,267
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Re: Roth IRA
There are many on this board (including myself) that sees our current tax rate as the lowest it will be for a long time. Since you are not in a high tax bracket in a time of low taxes overall, I would say you are an ideal candidate for a Roth IRA.
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10-23-2005, 01:10 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
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Re: Roth IRA
Yes, Roth.
Fav among the board - www.vanguard.com
Just order the Roth IRA kit and fill out the forms
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
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10-23-2005, 02:15 PM
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#4
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Confused about dryer sheets
Join Date: Oct 2005
Posts: 2
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Re: Roth IRA
Woot! Thanks guys!
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10-23-2005, 05:18 PM
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#5
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Dryer sheet aficionado
Join Date: Oct 2005
Posts: 31
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Re: Roth IRA
Recommend www.scottrade.com Much easier to work with, lower account
minimums, lower fees etc. All my grandchildren's accounts are with them, there are
company offices in various locations, where you can get answers when you need them. All the paperwork you need to get started is on their site.
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10-23-2005, 07:38 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
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Re: Roth IRA
Quote:
Much easier to work with, lower account
minimums, lower fees etc. All my grandchildren's accounts are with them, there are
company offices in various locations, where you can get answers when you need them. All the paperwork you need to get started is on their site.
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Well, I don't think that is 100% accurate. Lower fees on IRAs? You are gonna pay Vanguard exp ratios/fees and have to meet the min investment regardless of where you open it up. Lower fees on buying other funds outside of the Vanguard family for example is true. Or if you want to buy stocks within a retirement account is true. Fewer Vanguard funds available via Scottrade. Scottrade is good don't get me wrong but everything in terms of service or needs is subjective. I for one don't need a branch location. Service has been pretty good with Vanguard in my case. Just all up to what you prefer I guess.
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
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10-24-2005, 01:09 AM
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#7
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Dryer sheet aficionado
Join Date: Oct 2005
Posts: 45
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Re: Roth IRA
Quote:
Originally Posted by pagar
Recommend* * * * * www.scottrade.com* * * * *Much easier to work with, lower account
minimums, lower fees etc.* * All my grandchildren's accounts are with them, there are
company offices in various locations, where you can get answers when you need them.* All the paperwork you need to get started is on their site.
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Okay, I feel silly asking this question but er...I will. I was trying to sign up for a Roth account with Scottrade and had to leave. So, I saved my application and printed out the info. I need to go back to it. The only problem is that there is no place on the site to log on to find my application. I was planning on feeling dumb and calling a branch tomorrow and pray they don't take up too much of my time cause I won't have much tomorrow. Do you know wher on their site I can go to log in to find my half complete IRA form?
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10-24-2005, 08:10 AM
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#8
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Dryer sheet aficionado
Join Date: Oct 2005
Posts: 31
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Re: Roth IRA
Quote:
Originally Posted by wildcat
Well, I don't think that is 100% accurate. Lower fees on IRAs? You are gonna pay Vanguard exp ratios/fees and have to meet the min investment regardless of where you open it up. Lower fees on buying other funds outside of the Vanguard family for example is true. Or if you want to buy stocks within a retirement account is true. Fewer Vanguard funds available via Scottrade. Scottrade is good don't get me wrong but everything in terms of service or needs is subjective. I for one don't need a branch location. Service has been pretty good with Vanguard in my case. Just all up to what you prefer I guess.
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Scottrade info reads: No inactive account fees or Account Maintaninence fees
Vanguard info read: Low Balance fee $10; IRA custodial Fee $10
Scottrade info reads $500 to open an account.
Vanguard info reads: $1000 minimum.
For a person who had only a small amount to invest, I would think knowing that you can invest with a lower mimumun to get started and not have to pay any of these fees would be important
Scotttrade: personal broker in a local office who will tell you their name and what experience level they have. I would think this would be a absolute requirement
for someone just getting started in savings and IRA's.
I don't have a clue how to find a half completed form. But once you have the phone number for the branch nearest you, I suspect the phone will be answered
quickly by someone who can help you.
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10-24-2005, 10:16 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Aug 2004
Location: Houston
Posts: 1,448
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Re: Roth IRA
Scottrade sucks. $17 to trade a mutual fund? Fees like that will be the death of a low-balance Roth IRA. Their selection of no-transaction-fee funds is limited and does not include Vanguard. And their bait-and-switch for mutual fund investors in early 2005 has still left a bad taste in my mouth (transferred all my accounts elsewhere).
Go straight to Vanguard, even if it means saving up your cash until you have the minimum...you will be glad you did in the long run.
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10-24-2005, 10:57 AM
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#10
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Moderator Emeritus
Join Date: Feb 2004
Location: minnesota
Posts: 13,228
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Re: Roth IRA
Wherever you decide to set up the Roth--Vanguard, Scottrade, or whoever, the real important thing is to do it and at least pay attention to fees and expenses.
__________________
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No more lawyer stuff, no more political stuff, so no more CYA
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10-24-2005, 11:57 AM
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#11
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Recycles dryer sheets
Join Date: Jun 2005
Posts: 233
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Re: Roth IRA
I just set up my Vanguard account to automatically deduct $83/week from my checking account and put it into my Roth IRA!* I love the fact that it will all happen automatically.*
Why doesn't everyone do this?*
Why didn't I do this sooner?
As you can tell, I'm pretty excited.* Who knew that automated investing could be so much fun?
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10-24-2005, 12:06 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 2,610
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Re: Roth IRA
Got to agree that for mutual funds the average person is far better off using the services of the parent company.* That is to say, Vanguard or Fidelity or others.
I have been with scottrade for 7 or 8 years doing day trading and options* relating stuff, but I wouldn't think of using them as middlemen in fund transactions.
BTW, I am currently looking for a better broker so I'm not recommending scottrade for anything period.*
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10-24-2005, 12:18 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Re: Roth IRA
Quote:
Originally Posted by JPatrick
Got to agree that for mutual funds the average person is far better off using the services of the parent company.* That is to say, Vanguard or Fidelity or others.
I have been with scottrade for 7 or 8 years doing day trading and options* relating stuff, but I wouldn't think of using them as middlemen in fund transactions.
BTW, I am currently looking for a better broker so I'm not recommending scottrade for anything period.*
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If you are mostly trading stocks, ETFs and options, I have been happy with Schwab. Not so good with mutual funds, though.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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10-24-2005, 12:47 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 2,610
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Re: Roth IRA
Oh yeah Benji.
I got off track and overlooked your real question.
Do the Roth for sure.* At 19 you will be light years ahead of everyone else. Also, be sure to scrub behind your ears young man*
I'd also look at Fidelity which is my favorite of the fund companies.* Why? Greater selection by far, in many cases the minimums are lower.* Fees are quite competitive as is performance in many funds.* I admit I am perhaps the only believer (on this board) in Fidelity.
Lastly, I'd tell you not to automatically get some sleepy index fund in your Roth. Given the nontax nature, this is the perfect place for the fund that is going to go up 500% in your long lifetime.*
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10-24-2005, 03:22 PM
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#15
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Dryer sheet aficionado
Join Date: Oct 2005
Posts: 45
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Re: Roth IRA
Quote:
Originally Posted by SLC Tortfeasor
I just set up my Vanguard account to automatically deduct $83/week from my checking account and put it into my Roth IRA!* I love the fact that it will all happen automatically.*
Why doesn't everyone do this?*
Why didn't I do this sooner?
As you can tell, I'm pretty excited.* Who knew that automated investing could be so much fun?
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LOL
I totally understand your joy. After reading the automatic millionaire, I'm all about saving automatically. I don't even miss the money and the next thing you know, you're rich...hehehehehe.
I do have a question. How was the setup with Vanguard(easy, long, etc.). Also, is there a way to set up the roth where they take the money out before it even goes to your checking. I have my TSP set up like that I like it cause I don't even accidently get to see the $$ in my checking before it's taken out
Thanks
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10-24-2005, 04:06 PM
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#16
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Recycles dryer sheets
Join Date: Jun 2005
Posts: 233
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Re: Roth IRA
In answer to your first question, it is EASY and FAST.* It just takes a few minutes.
And yes, in answer to your second question, you can set up direct deposit also.* You can send as much of your paycheck as you want directly to Vanguard, and give Vanguard instructions about how to invest it.* Here's their FAQ on the issue:
* https://flagship5.vanguard.com/VGApp...sitContent.jsp
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10-24-2005, 05:01 PM
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#17
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Dryer sheet aficionado
Join Date: Oct 2005
Posts: 45
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Re: Roth IRA
Thanks SLC. I will check it out.
JP, thanks for the Fidelity tip(I know it wasn't for me) but it really helped. I was just at their site and now I question going with Scottrade. I also have to check out Vanguard now. Oh my, so many choices but that's a good thang
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10-25-2005, 10:13 AM
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#18
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
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Re: Roth IRA
Just so everything is clear and I did a little research to see if Vanguard funds could be bought @ Scottrade for a Roth & have all fees waived -
Scottrade's response is - investors will be subject to all fees & expenses listed in the fund's prospectus. So that includes exp ratios & account maint fees. Not sure about custodial fee charged on Roths but that fee is waived once the amount invested in a fund is above a certain $ amount ($5,000) or if your total Vanguard assets are > I think 50k
Make your own choices but these are da facts
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
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10-25-2005, 01:31 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,005
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Re: Roth IRA
It seems like getting dinged with a couple of $10 custodial fees for a few years at Vanguard in exchange for access to 0.2-0.3% excellent mutual funds is a good deal. In a couple of years, your balance will be $5k, and no more custodial fees. Compare that to $17 per month for buying in to the same funds at Scottrade. Pick one of the Vanguard non-index funds if you don't want to pay the $10 index fee for balances less than $10000. Lifestrategy and target retirement set of funds at Vanguard are great for avoiding the $10 index fee, and getting superlow expense ratios.
If you're going to be a gunslinging trader in your Roth IRA, maybe go with Scottrade. Good luck giving away all your savings in commissions though!
I haven't looked at Fidelity for IRA's. They don't have as many low expense ratio index funds as Vanguard.
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10-25-2005, 01:42 PM
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#20
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Thinks s/he gets paid by the post
Join Date: Feb 2005
Location: Lou-evil
Posts: 2,025
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Re: Roth IRA
I was trying to be unbiased. In reality, I prefer Vanguard and do all of my biz there. $10 custodial fee on accounts below $5000 is no biggie to me.
__________________
"These walls are kind of funny. First you hate 'em, then you get used to 'em. Enough time passes, gets so you depend on them"
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