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Author: cdr46 Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75381  
Subject: Re: Roth; too many choices! Date: 8/23/2001 1:21 AM
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"I am hell-bent on getting a Roth IRA going this year.
I've spent hours everyday at a variety of sites, running a variety of "fund chooser" tools, and I'm still really overwhelmed by all the choices out there!"

It's called information overload and in my opinion, the industry likes it that way. Too many choices leads to obfuscation and the perceived need for "professional" help.

Don't get me wrong - I think a good stockbroker or professional insurance agent is worth their price. But, in my opinion, if fees and commissions concern you, and you are somewhat intelligent you can do just as well or better than the "pros".

Review my post at http://boards.fool.com/Message.asp?mid=15590718
Re: Late Start Retirement Planning
Correction to book list -book by Mr. O'Neill is:
How To Make Money In Stocks", by William O'Neill

One more book I highly recommend is:
"Retire Early", by John F.Wasik (all of his books are excellent)

TMF has some excellent advice although at times it seems they go on forever with amusing anecdotes instead of getting to the heart of the matter.

The books and web links I recommend, in my opinion, cut to the chase.

You don't have to read every book and surf every web link prior to making a decision to open a ROTH.

Some questions you need to address are:
1) Do you consider yourself a passive or take charge person?
2) Do you intend to pick individual stocks or stay with passive mutual funds once your IRA reaches a sizable amount?
3) Do you understand the difference between a ROTH and a regular IRA?
4) Does your company offer a retirement plan and if so are you participating in it?
5) How old are you?
6) Do you plan on retiring at age 65 or earlier?

The longer you wait the harder your savings are going to have to work.

Remember that - everything else being equal - fees and commissions act like an anchor on long term investment results.
Example:
$2,000 invested every year for 30 years earning 12% (tax free or deferred) will grow to $540,585.21.
Adjust for the average fees and commissions from the above 12% and you end up with at least a 1.5% drag on earnings which would result in the above $2,000 growing to only $399,748.10 after 30 years.

That's a difference of $140,837.11. That should be incentive enough for you or anybody to do a little homework.

Almost all no-load mutual funds will allow you to set up an automatic draft from your bank for your IRA as well as non-IRA accounts.

You can have multiple IRAs, multiple broker accounts, etc., Of course by consolidating your accounts you will somewhat simplify your life. But by having multiple accounts you also have access to more options. There are aggregate web sites that simplifies all of this.

You can open self directed IRA accounts at many no load mutual fund companies - www.vanguard.com as well as regular discount brokers.

You can open IRA accounts directly with some solid NYSE companies, like General Electric - http://www.ge.com/.

Other companies that allow direct stock investment can be found at http://www.gefn.com/directstock/index.html . Not all companies allow you to set up IRA accounts yet, but many do.

Detractors will say: "what about diversification".
My answer: Get a copy of GE's annual report. In my opinion, GE is more "diversified" than many mutual funds. Every time I drive by Wal-Mart and see all those cars in their parking lot - I smile, because it means people are spending money, which benefits the bottom line of Wal-Mart.

Hope this helps.
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