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I am self-employed and want to start a SIMPLE IRA. This employer sponsored plan would let me invest up to $6000/year as a tax deferred retirement account. The plan uses salary reductions to fund the plan. I am planning to start with $500/month salary reduction. I would like to invest it in stocks.

My dilemma is that to invest this $500/month, I would be paying (assuming I had four stocks) $40-$130 a month in brokerage fees (that's 8-26% of my investment, $480-1560 a year and, $40,000-130,000 over 30 years assuming, I hope, 12% interest). And if I decided to sell one or more of the stocks, it would obviously be more. Plus the yearly account fee.

Do I just save up the whole year's salary reductions and then invest them at the end of the year, or do I give up on trading stocks in such an account and go with an inexpensive mutal fund account like Vanguard's. They charge just $10 a year for account maintenance. And my money could be invested monthly without further charges.

I'd appreciate Foolish comments and info!

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