Posted by Natalie-VA on December 13, 2006 at 16:24:02:
Yes, I was referring to a money market account which is conservative. You might consider buying a book to learn about different kinds of mutual funds. I think I read one from either the “Idiots” or “Dummies” series years ago.
–Natalie
Roth IRA question - Posted by Chris-PA
Posted by Chris-PA on December 12, 2006 at 08:26:50:
Hi all, I am 21 and looking to start a Roth IRA. I have some quick questions. I think im going to start out with mutual funds. Im wondering, can I later in time change this to a self directed IRA if I want to use it in real estate investing? Also, if im going with mutual funds, what is the average return %? I thought I heard the stock market was 9% on average.
PS- does anyone know where I can find the chart that shows for example…if you start putting in $4000 at age 21 until say age 35 and then never touch it again…It shows about how much you would have in the account when u retire. I say a chart like that once that assumed 9% return i believe.
Anyhow, hope you guys can help, im just know reading to try and find out the best way to go about opening my roth ira.
Good free IRA info - Posted by John Merchant
Posted by John Merchant on December 14, 2006 at 10:23:33:
Some great free resources for IRA investor:
First, the IRS Pub. 590. This 120+pp free doc from IRS site or offices tells what current rules are for IRAs, is revised annually, and should be in every IRA owner’s bookcase.
Secondly the free info available on many company websites, such as Mass Mutual Funds, Vanguard, etc., etc. ad infinitum.
And for the world of REI, those free websites by the SDIRA Custodian/Trustee companies such as Pensco, Entrust, Equity Trust have tons of free info such as current contribution levels, prohibited actions, etc.
Re: Roth IRA question - Posted by sadi
Posted by sadi on December 13, 2006 at 11:16:28:
I like the calculators at:
Re: Roth IRA question - Posted by ken
Posted by ken on December 12, 2006 at 18:23:29:
Yes you can start out with mutual funds and later move it to a self directed IRA and do real estate.Equity trust can do it their website is trustetc.com
Re: Roth IRA question - Posted by JimmyCrackedCorn
Posted by JimmyCrackedCorn on December 12, 2006 at 11:56:05:
Hey,
1st off, listen to John and learn to do this yourself on a financial calculator. But if you wanna toy around with numbers, heres a link to what you’re looking for. Compound Interest Calculator
Re: Roth IRA question - Posted by John Sheridan
Posted by John Sheridan on December 12, 2006 at 10:00:52:
I’m always glad to see a young person wanting to learn how to be responsible with money. Too many kids your age just say “let me live it up today, I’ll think about saving later”. Problem is, “later” doesn’t come until it’s much too late.
The average return of the stock market is somewhere around 10% to 12%. Financial planners like to say 9% to be conservative. But keep in mind, that assumes a highly diversified investment over the long term. “long term” means 10 years at the very least, and preferably more than 15 years. In shorter term it can do anything.
As for calculating how much you will have, you can do this very easily yourself with a financial calculator. You can buy one for very cheap nowadays. This is a good thing to learn - if you can’t do the simple (please forgive me for being blunt) calculation that you mentioned in your post ($4000 per year for x years at y% interest), then no way will you be able to even get started in real estate investing. So get one and learn how to use it - think if it as the beginning of your financial education.
Where is the best place to open the account? - Posted by Chris-PA
Posted by Chris-PA on December 13, 2006 at 08:20:28:
That raises another question. Where is the best place to open the account with the lowest fees? Would you say trustetc.com is the best?
Re: Where is the best place to open the account? - Posted by Natalie-VA
Posted by Natalie-VA on December 13, 2006 at 10:07:19:
Chris,
If you’re going to start with mutual funds, I recommend using Vanguard. Their website is www.vanguard.com. Even their conservative Prime Money Market account pays over 5% right now.
–Natalie
Re: Where is the best place to open the account? - Posted by Jim
Posted by Jim on December 13, 2006 at 11:11:44:
Hi Natalie,
I have been meaning to open a Roth IRA with Fidelity. Your post brings up another thought, why pick Vanguard over Fidelity? What are the pros and cons of these two retirement plans?
Also, I know last year the mex we can contribute to a Roth IRA is $4,000 but was wondering if it is the same now?
Thanks for your input.
Jim
Both Vanguard and Fidelity are good - Posted by Don (VA)
Posted by Don (VA) on December 14, 2006 at 10:34:45:
Both Vanguard and Fidelity are good. My present employer uses Vanguard for the 401(k), and my only complaints are that the fund selection we have is somewhat limited (they’re trying to protect us from ourselves). I rolled over an IRA from a previous employer to Fidelity, and am very pleased. Tremendous fund selection and a website with great research tools. Vanguard is known in the industry for being hyper-efficient and thus has some of the lowest fees around. However, it all depends on your picks. My Fidelity funds are no-load, and if I’m paying 1.5%, versus maybe 0.8% at Vanguard, but finding funds that yield 20%-30% annually, I don’t mind. Bottom line: I personally prefer Fidelity, but you won’t go wrong with either.
Re: Where is the best place to open the account? - Posted by Natalie-VA
Posted by Natalie-VA on December 13, 2006 at 13:31:10:
I have money with Fidelity also. They’re both good companies. Vanguard is member owned. Historically I’ve had better returns on my mutual funds there. I would just research the available mutual funds with each company and put your money in the one that has the funds you like.
I think the contribution limit is $4000 again this year, but double check me.
–Natalie
Re: Where is the best place to open the account? - Posted by Chris-PA
Posted by Chris-PA on December 13, 2006 at 14:05:02:
Im curious, you mentioned a 5% return in your last post. I was under the impression it would be around 9 or 10%. Is it 5% on that account simply because it is very safe and not agressive