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Good place to open Roth IRA?


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23 replies to this topic

#1 Meltz

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Posted 01 January 2012 - 09:48 PM

What's a good institution to open a Roth IRA?



#2 mizugori

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Posted 01 January 2012 - 10:03 PM

T rowe price and edward jones are very good

#3 Mortgagase

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Posted 01 January 2012 - 10:58 PM

Ingdirect has great products for a Roth Ira. Can all be done online in a few minutes.

#4 Kevin20

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Posted 02 January 2012 - 01:36 AM

What's a good institution to open a Roth IRA?



Are you planning to start small and put in a little each month? Or do you have a bundle of a few thousand saved up that you want to invest to start?

If you have at least 1 or 2 thousand on hand, I prefer discount online brokers such as Schwab or Ameritrade, where you can choose from a huge variety of ETFs and mutual fund families. But if you are starting small you might be better off with a mutual fund family that lets you open with a small minimum investment in a fund, and invest small amounts regularly.

#5 Meltz

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Posted 02 January 2012 - 12:51 PM

Well I do have some money saved that I'd like to deposit to start and i do want to contribute monthly, but I'm still not sure how all this works, I'm just starting out so I don't wanna go too risky and loose all my money. I do understand i have to go risky to make money but not until I Learn more about how investing works. Right now just looking for a good place to start, maybe transfer later but I'm not sure how much money is involved with transferring funds from one institution to another. I was looking at Scottrade, anyone have any experience with them?

Edited by Meltz, 02 January 2012 - 12:52 PM.


#6 Kevin20

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Posted 03 January 2012 - 09:22 PM

Well I do have some money saved that I'd like to deposit to start and i do want to contribute monthly, but I'm still not sure how all this works, I'm just starting out so I don't wanna go too risky and loose all my money. I do understand i have to go risky to make money but not until I Learn more about how investing works. Right now just looking for a good place to start, maybe transfer later but I'm not sure how much money is involved with transferring funds from one institution to another. I was looking at Scottrade, anyone have any experience with them?



I do use Scottrade for a Roth IRA. It's cheap, but its web interface is rather poor. They just have pretty lousy design. It offers access to lots of mutual funds, but it can be difficult filtering and searching on funds and figuring out which ones waive a commission in Scottrade and which charge, etc.

I also use Schwab for my traditional IRA, which I very much prefer. Best brokerage website I've seen. A good tip is to use the Schwab branded ETFs (exchange traded funds). These are similar to other big-name index funds like Vanguard, but trade commission-free in Schwab, and also have supremely low built-in management fees. It's the closest thing yet to no-cost investing. And one respectable investment theory is that since you can't beat the market with good picks, the best thing you can do is minimize the drag of costs attached to your investing.

Google "Schwab ETFs" to learn more. Actually a very good plan to start is to divide your money up among 4 or 5 Schwab ETFs.

TD-Ameritrade similarly has a group of commission-free ETF's, but I'm not familiar with them lately.

A brokerage account like Schwab or Scottrade is as low-risk or high-risk as you want it to be. In addition to all the ETFs and stocks that trade on the market, they all offer access to many families of mutual funds -- some with a commission, some free of commission, some with a sales load, some no-load. So generally you search out the commission-free no-load funds your broker offers, if you want to buy mutual funds.

You can certainly invest prudently and conservatively at a discount broker if you want. The risk is that you watch too much CNBC and decide you're a gunslinger and then start day-trading your IRA. But if you avoid that disease you'll be fine.

Edited by Kevin20, 03 January 2012 - 09:25 PM.


#7 mizugori

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Posted 04 January 2012 - 08:27 AM

I cannot stress enough, t rowe price is perfect for what you want to do, as long as you have at least 2k to start your account. Check them out.

#8 Meltz

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Posted 04 January 2012 - 08:56 AM

Thanks guys for the info. I'll keep researching as I decide who I want to go with.

#9 luckydriver

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Posted 04 January 2012 - 03:02 PM

I cannot stress enough, t rowe price is perfect for what you want to do, as long as you have at least 2k to start your account. Check them out.


LONG time ago i started with 50 mo min per month auto pay...dont they still have that?

#10 mizugori

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Posted 04 January 2012 - 03:59 PM


I cannot stress enough, t rowe price is perfect for what you want to do, as long as you have at least 2k to start your account. Check them out.


LONG time ago i started with 50 mo min per month auto pay...dont they still have that?


No, that is actually how I started out too, way back when lmao. But they changed it, you need a minimum balance to open now, at least that is what I was told when I last spoke with them.

#11 luckydriver

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Posted 05 January 2012 - 08:40 AM

By keeping our investment minimums low, we make it easy to start saving with our funds. The chart below shows what you need to get started.


Taxable Accounts IRAs
$2,500** $1,000

Our Automatic Asset Builder (AAB) service allows you to contribute monthly to your investment with as little as $100 per transaction, after the minimum to open an account is satisfied.

#12 Meltz

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Posted 05 January 2012 - 10:54 AM

I'm looking toward going with schwab. T Rowe doesn't have an iPhone app. Boo! Big plus for me as I use my iphone, or soon ipad, before I use a computer. Schwab also is rated pretty well on most brokerage reviews, only thing is their customer service has mixed reviews on it.

Edited by Meltz, 05 January 2012 - 10:56 AM.


#13 bullthistle

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Posted 08 January 2012 - 10:30 AM

I would be careful with a phone app. Hackers. I have everything on my PC but hackers still got into my e-mail account without logging in from Nigeria & Germany. I don't use a cell and no way would I trust it if I did just because they don't have good security and I have Fidelity which as far as I am concerned is great, $7.95 stock trades and free mutual funds like Vanguard.

#14 Meltz

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Posted 08 January 2012 - 11:50 AM

I dont know what all these fee mean so i can't tell if it's good fees or not. I'm still looking more into that. And I don't know if I trust iPhone apps either but I trust my account information.

#15 foeplay

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Posted 16 January 2012 - 02:38 PM

I use Vanguard for their excellent expense ratios. I think they have funds that start with $1k initial investments which you can easily change as you build up your money in the account.

#16 Kevin20

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Posted 17 January 2012 - 11:46 PM

I dont know what all these fee mean so i can't tell if it's good fees or not. I'm still looking more into that. And I don't know if I trust iPhone apps either but I trust my account information.



Meltz, here's run-down of fees you'd see with mutual funds (and ETF's, which are just mutual funds packaged more conveniently).

Built-in to the fund:

Management Fee or Management Ratio: this is the percent-of-fund-balance absorbed annually by the fund company. It's their source of revenue.

12b-1 fees: this is also a fee absorbed from the fund balance. It has a separate label because it specifically coves the cost of information distribution and marketing fund info (printing fund prospectuses and the like).



Together those fees might run up to 1% or 2% of your balance per year. Traditionally anything under 1.0% was pretty good, but costs have gotten a lot less in recent years. For many ETF's the fees get down below 0.2%, which is awesome. Note: published fund performances are net of these fees (already subtracted so you don't have to do the math).

Additionally you might see:

Sales commission from the broker. Usually this is waived for some group of fund families at a discount broker, but charged for other funds.

Sales Load. This is a deduction on newly invested money in the case of loaded funds (actually there are A, B, and C shares, all of which feature loads that are charged differently. Mostly retail investors see A-shares, a percent off the top). Generally if you are investing yourself and not relying on advice from a broker or financial advisor, you avoid these and buy no-load funds.

... What I like about ETF's are the fees are nicely transparent. The only cost is the regular stock-trading commission if there is one -- which is cheap at a discount broker, or free if they have a special deal on certain ETFs -- and a management fee you can look up, which is usually very low for ETFs. For something like the Schwab-brand ETFs, the total costs are practically zero.

#17 Meltz

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Posted 18 January 2012 - 12:30 PM


I dont know what all these fee mean so i can't tell if it's good fees or not. I'm still looking more into that. And I don't know if I trust iPhone apps either but I trust my account information.



Meltz, here's run-down of fees you'd see with mutual funds (and ETF's, which are just mutual funds packaged more conveniently).

Built-in to the fund:

Management Fee or Management Ratio: this is the percent-of-fund-balance absorbed annually by the fund company. It's their source of revenue.

12b-1 fees: this is also a fee absorbed from the fund balance. It has a separate label because it specifically coves the cost of information distribution and marketing fund info (printing fund prospectuses and the like).

Together those fees might run up to 1% or 2% of your balance per year. Traditionally anything under 1.0% was pretty good, but costs have gotten a lot less in recent years. For many ETF's the fees get down below 0.2%, which is awesome. Note: published fund performances are net of these fees (already subtracted so you don't have to do the math).

Additionally you might see:

Sales commission from the broker. Usually this is waived for some group of fund families at a discount broker, but charged for other funds.

Sales Load. This is a deduction on newly invested money in the case of loaded funds (actually there are A, B, and C shares, all of which feature loads that are charged differently. Mostly retail investors see A-shares, a percent off the top). Generally if you are investing yourself and not relying on advice from a broker or financial advisor, you avoid these and buy no-load funds.

... What I like about ETF's are the fees are nicely transparent. The only cost is the regular stock-trading commission if there is one -- which is cheap at a discount broker, or free if they have a special deal on certain ETFs -- and a management fee you can look up, which is usually very low for ETFs. For something like the Schwab-brand ETFs, the total costs are practically zero.

I appreciate this info. I will use it once I start investing. Right now I'm trying to pick a place to start. I'm thinking either Scottrade or schwab as of now. Still doing some research. I appreciate all the info and help :)

#18 hegemony

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Posted 20 January 2012 - 04:28 PM

I use Vanguard for their excellent expense ratios. I think they have funds that start with $1k initial investments which you can easily change as you build up your money in the account.


+1

I have accounts with Vanguard and Fidelity. Both are excellent. Fidelity has a local office too and I usually get some free lunches and advice a couple times a year.

#19 Meltz

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Posted 20 January 2012 - 04:39 PM


I use Vanguard for their excellent expense ratios. I think they have funds that start with $1k initial investments which you can easily change as you build up your money in the account.


+1

I have accounts with Vanguard and Fidelity. Both are excellent. Fidelity has a local office too and I usually get some free lunches and advice a couple times a year.

Really? I know we live in the same city so I'll have to check it out. Thanks

Edited by Meltz, 20 January 2012 - 04:39 PM.


#20 hegemony

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Posted 20 January 2012 - 04:59 PM


I use Vanguard for their excellent expense ratios. I think they have funds that start with $1k initial investments which you can easily change as you build up your money in the account.


+1

I have accounts with Vanguard and Fidelity. Both are excellent. Fidelity has a local office too and I usually get some free lunches and advice a couple times a year.

Really? I know we live in the same city so I'll have to check it out. Thanks


I use the Fidelity office at The District.

#21 Meltz

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Posted 20 January 2012 - 07:18 PM



I use Vanguard for their excellent expense ratios. I think they have funds that start with $1k initial investments which you can easily change as you build up your money in the account.


+1

I have accounts with Vanguard and Fidelity. Both are excellent. Fidelity has a local office too and I usually get some free lunches and advice a couple times a year.

Really? I know we live in the same city so I'll have to check it out. Thanks


I use the Fidelity office at The District.

Yeah I believe that's the only fidelity in Vegas. I'm going to have to check it out soon.

I just visited Scottrade, they seem quite knowledgeable and professional. This whole investing is very confusing and new to me at the moment so I'm just looking around till I understand more before I make a move and open an account.

#22 Kevin20

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Posted 20 January 2012 - 10:02 PM

I just visited Scottrade, they seem quite knowledgeable and professional. This whole investing is very confusing and new to me at the moment so I'm just looking around till I understand more before I make a move and open an account.



Feel free to take it as slowly as you need. You can always open your account and make the initial deposit, and just let the money sit there in cash until you decide how to allocate it. (Since banks don't pay interest on savings anymore ... might as well.)

I like the idea of getting that foot in the door, the stake in the ground ... otherwise you risk paralysis by analysis.

#23 Meltz

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Posted 21 January 2012 - 12:42 AM

True that, I actually want to do that. My other problem is which brokerage company to go with, there are so many. And part of that knowledge I'm working on is learning more about fees of each company, what certain features each company offers, etc.

#24 Kevin20

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Posted 22 January 2012 - 12:14 AM

True that, I actually want to do that. My other problem is which brokerage company to go with, there are so many. And part of that knowledge I'm working on is learning more about fees of each company, what certain features each company offers, etc.



Well for what it's worth IMHO I like Schwab the best. I have experience with 4 online brokerage systems (though a couple of them were awhile ago), and I've always found the Schwab website to be excellent in design, navigation, using the research tools and filters, etc. You can find slightly cheaper commissions elsewhere, but keep things in perspective, you're talking about a different of like $5 on multi-thousand dollar trades. Unless you're an active day trader, I wouldn't sweat the commission price too much. They are all radically cheap compared with the old days.

Ameritrade seems compelling but I haven't used it since the days of TD-Waterhouse some years ago, so I can't say what the web experience is like.

Scottrade is cheap and basic, and they seem to have retail offices everywhere which is nice. But dang, their website frustrates me every time I log on. They just have a knack for poor design. I'm also found in some cases that you need the retail offices because some things that SHOULD be do-able online are not.

Finally, you can certainly have multiple brokers. I currently use Schwab for traditional IRA and Scottrade for Roth, and I'm contemplating opening up a regular brokerage account at Ameritrade. For me a good reason for multiple accounts is to avoid confusion. In the past having different account types at the same broker, I absolutely have logged into the wrong account by mistake and made trades where I didn't mean to (leading to some embarrassing phone calls pleading for help). I do a similar think with banks -- use different ones to compartmentalize my activities. Nothing wrong with that, these days you're not even bothered with too much snail mail as a result.




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