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Author: Belgoboy Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75777  
Subject: On the road to retirement riches :-) Date: 3/6/2004 12:06 AM
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I everyone. I just wanted to thank you all for your positive spirit, and lack of bickering. Before the close of business today, and after having pondered and waitetd for about 2 years I finally went ahead and opened a Roth IRA with Scottrade. I will be able to choose my fund(s) on Tuesday once my account is credited and I'm about 99% sure I'm going to go with VTSMX. The 1% being that I am open to any criticism or last minute advice regarding my ROTH IRA. Hopefully of course for me this is a win win situation. I'm starting out with 1k and hopefully putting $500/transaction up to the 3k max for the year.
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Author: ResNullius Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39716 of 75777
Subject: Re: On the road to retirement riches :-) Date: 3/6/2004 7:52 AM
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Good luck, and don't forget to enjoy the ride while you travel the road to retirement.

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Author: MissouriGup Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39717 of 75777
Subject: Re: On the road to retirement riches :-) Date: 3/6/2004 8:21 AM
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I finally went ahead and opened a Roth IRA...

Smart move.

...with Scottrade.

Great choice.

...I'm going to go with VTSMX.

Another great choice.

...hopefully putting $500/transaction up to the 3k max for the year.

Perfect.

Gup

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Author: SuaSponteMark Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39718 of 75777
Subject: Re: On the road to retirement riches :-) Date: 3/6/2004 11:12 AM
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I'm starting out with 1k and hopefully putting $500/transaction up to the 3k max for the year.

Well done buddy.

I personally like to keep my "management fees" which I define as trading transaction fees I incur to 1% or less, so on a $10 Scottrade transaction fee to buy (I think they're $10 or so...?) you're at 1% with your initial contribution. I would consider saving another 1k before you buy again.

I'm fortunate that I'm in a position where I can contribute to my IRA in one chunk and do so in the beginning of the year, and thus pay about 0.33% in "management fees." Over time this even attrits, as will your costs, if you don't make a lot of moves in your account. If you disregard the fees required to run the fund, which as we known are fractions of a percent of around 0.2% or so (we can't NOT pay these so I don't worry about them for index funds too much), we end up halving our "management fees" in the second year. You paid $10 for the trade in Year 1 and in Year 2 if you don't touch your VTSMX you incur no additional fees, so your $10 on 1k goes to $5/year, essentially, and the cost to you goes from 1% to 0.5%.

Just another viewpoint on why my accounts don't see much activity other than a once a year or so buy, and maybe getting rid of a position that I feel is not working for me as well as it might any more.

Mark


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Author: Belgoboy Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39724 of 75777
Subject: Re: On the road to retirement riches :-) Date: 3/6/2004 5:57 PM
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Hi Mark,

Unless I'm mistaken I don't have to pay any fees in order to purchase my IRA funds. Correct me if I'm mistaken.

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Author: SuaSponteMark Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39725 of 75777
Subject: Re: On the road to retirement riches :-) Date: 3/6/2004 6:03 PM
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Unless I'm mistaken I don't have to pay any fees in order to purchase my IRA funds. Correct me if I'm mistaken.

You don't directly pay a fee to open an IRA, but any time you make any sort of trade through Scottrade, they're going to charge you. Your $1k will really buy you $993 of whatever you choose (assuming a market order, which are $7 at Scottrade - a pretty low fee). This is why active trading attrits your retirement accounts, or a taxable account for that matter.

The management fees of about 0.2% for most index funds are not quite negligible, but are about as low as they come for a fund.

Basically, you send Scottrade a check to deposit in your IRA account for $1000. You put in a market order or what not to buy VTSMX, and they will buy you ($1000-7)/(price of VTSMX at the time). Your account value will be $993 right at the time of the trade.

Mark

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Author: MissouriGup Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39726 of 75777
Subject: Re: On the road to retirement riches :-) Date: 3/6/2004 8:07 PM
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Basically, you send Scottrade a check to deposit in your IRA account for $1000. You put in a market order or what not to buy VTSMX, and they will buy you ($1000-7)/(price of VTSMX at the time). Your account value will be $993 right at the time of the trade.

Mark, I think you may be mistaken about this. A person can purchase any of the mutual funds that Scottrade offers for no charge. I asked them (a counter person at Scottrade) how they could offer a free service like that. She said that the mutual fund companies pay Scottrade a very small kick back, but they (Scottrade) are hopefull that someday the people that are buying mutual funds will start nibbling at stocks.

Gup


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Author: Belgoboy Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39728 of 75777
Subject: Re: On the road to retirement riches :-) Date: 3/7/2004 4:57 AM
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Thanks Gup. I'll maybe ask a fellow Fool here as well who has been working with Scottrade.

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Author: MissouriGup Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 39729 of 75777
Subject: Re: On the road to retirement riches :-) Date: 3/7/2004 5:20 AM
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Thanks Gup. I'll maybe ask a fellow Fool here as well who has been working with Scottrade.

That would be me. I have both my wife's and my Roths at Scottrade, as well as small regular IRA. Both Roths are invested in mutual funds. When I buy into the funds, I do not pay any commissions.

Gup

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