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here's the question:

I have $2000 to do what I please with. I have 2 thoughts:
1. Put it into the market and see what happens (I am very much a novice in the market)
2. Open a self-directed roth ira through a no-fee discount broker (probably etrade)

The problem is that if I open the Roth IRA, I wont be able to contribute to it anymore, since my income for 1999 will likely exceed the maximum allowable.. certainly, if not in 1999 then in 2000. That means that at most it will have $4000 in it to start, probably more like $2000.

So, should I just put it into the IRA and let it stand, accumulating, for 30 years without being able to contribute to it, or...

Put the money in the stocks, pay taxes on any capital gains, expose myself to more risk, and be able to continue to contribute to this "portfolio"?

thanks in advance, happy holidays,

doc dave

ps.. if i put it into the ira, will I be able to change the stocks that I have purchased within the IRA?
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Greetings, Doc Dave, and welcome. You asked:

<<I have $2000 to do what I please with. I have 2 thoughts:
1. Put it into the market and see what happens (I am very much a novice in the market)
2. Open a self-directed roth ira through a no-fee discount broker (probably etrade)

The problem is that if I open the Roth IRA, I wont be able to contribute to it anymore, since my income for 1999 will likely exceed the maximum allowable.. certainly, if not in 1999 then in 2000. That means that at most it will have $4000 in it to start, probably more like $2000.

So, should I just put it into the IRA and let it stand, accumulating, for 30 years without being able to contribute to it, or...

Put the money in the stocks, pay taxes on any capital gains, expose myself to more risk, and be able to continue to contribute to this "portfolio"?>>


That's up to you. Ultimately, anything you take from the Roth IRA will be totally tax-free. $2K, though, is a very small amount to do trading even at a discounter. $4K is perhaps the minimum where it makes sense. Otherwise trading costs cut significantly into your returns. And BTW…. That's true in either an IRA or a taxable account.

<<ps.. if i put it into the ira, will I be able to change the stocks that I have purchased within the IRA?>>

Yes, you can trade at will and without tax impact within the IRA.

Regards….Pixy
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