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Hi all,
I'm a Fool newbie and an overall investing newbie as well. I am 28 yrs old and looking to start a Roth IRA. I've been married for two months now (thank-you). I've read almost every post and every article I can find as well as signed up for the free month of Champion Fund here at Fool. All this reading has me one thing… very confused. I think I'm over-thinking this decision and it's costing me valuable time. I need to pick a company to get my IRA through, so I've broken down and decide to ask fellow fools for help. I've read all about fees and this, that and the other. I'm a very aggressive personality and am looking to invest that way, but be educated about it. I like stocks, mutual funds and possibly ETFs (if I truly understand what they are). I also like to be involved and know where exactly all my money is going. Could someone(s) please give me some advice on whom to go with to start up my Roth IRA? I may do some stock trading on the side, but it would be VERY minimal at this point, if at all.
Oh, and I'll be putting the max in the Roth IRA up front, not making monthly payments. Not sure if I'll be financially fit enough to do this each year, may have to move to monthly payments in the future. Also, I HAVE to have online access; I've recently moved to a small town and no longer get to “the big city” much.

Thanks much in advance!
-Jay from MN
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All this reading has me one thing… very confused.

Two key phrases: "information overload" and "analysis paralysis".

Sometimes more reading is not the answer.

My Advice: Vanguard if you can put off stock trading for a while and will always have at least $5000 in each mutual fund*. Otherwise, Scottrade. (remember that until April 17 you can still contribute for 2005, so you could potentially start out with $8000 in the IRA)

But we should point out that the Fool has an IRA center where you can compare online brokers who are advertising on the Fool:
http://www.fool.com/ira/ira.htm?source=LN

Keep the money in something low-risk until you're more confident. But do start a paper portfolio where you execute pretend trades.
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Note that the IRA center is only comparing advertising partners. Scottrade is not on the list but should be on your radar. There are no account maintenance fees. Non-NTF (No Trade Fee) transactions are only $17. If you want to expand to a brokerage account in your Roth IRA, it is only $7 per trade, market or limit.

Fuskie
Who currently holds 4 different retirement accounts with Scottrade...
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> I'm a very aggressive personality and am looking to invest that way

If you plan to pursue aggressive capital appreciation, most of the board at MF will be pretty useless. I would pick up a book like "How to make money in stocks" by William O'Neil (founder of the newspaper Investor's Business Daily), who popularized the CANSLIM methodology for stock selection, analysis, and trading. There is a CANSLIM board on MF, though it's not as active as you might want it.

Most people perusing around MF will advocate buying Vanguard mutual funds and then sticking your head in the sand...

As for brokers, it depends on if you want to trade stocks or buy mutual funds. I've had experience with Ameritrade, Etrade, and Fidelity, and like Ameritrade for trading stocks by far (since they give real time quotes and have a great interface).

Best of luck!

Illini2001
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Most people perusing around MF will advocate buying Vanguard mutual funds and then sticking your head in the sand...

Not in my experience. The newsletter-specific boards are extremely active with people looking for the next five-bagger or ten-bagger.
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Illini2001 "Most people perusing around MF will advocate buying Vanguard mutual funds and then sticking your head in the sand..."

jrr7 "Not in my experience. The newsletter-specific boards are extremely active with people looking for the next five-bagger or ten-bagger."

I agree jrr,

I checked I's profile. In the past 99 posts going back to 8/16/04 there are no posts on any newsletter board, nor several boards I frequent that are non-newsletter boards. I subscribe to Hidden Gems, Stock Advisor & Inside Value... I would hardly describe many of the poaters there as Illini does. I also doubt that the Rule Breakers folks focus on MFs ;-)

Some folks do use mutual funds and ETFs as a foundation...

Regards, Ken
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Most people perusing around MF will advocate buying Vanguard mutual funds and then sticking your head in the sand...

I don't think anyone would suggest thing. I think most people would suggest buying Vanguard or other low cost mutual funds and then checking up on them on a yearly or semi-yearly basis.
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(remember that until April 17 you can still contribute for 2005, so you could potentially start out with $8000 in the IRA)

jrr7 - If I've got $4000 to invest right now, would you recommend starting one Roth with $4000 in it or two Roth IRAs (one for me and one for my wife) with $2000 in each? Does it matter? After the initial deposit(s) I would make monthly contributions. Also, if I open a Roth IRA can I make my initial deposit be for 2005 and have my monthly contributions go towards 2006?

The paper portfolio is a great idea.

Thanks again, much appreciated!!
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If I've got $4000 to invest right now, would you recommend starting one Roth with $4000 in it or two Roth IRAs (one for me and one for my wife) with $2000 in each? Does it matter?

How long are you planning to stay married ? I would strongly suggest you discuss this with your wife - both what you want to do now and what you want to do in the future. That goes whether you think she's interested or not.

rad

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jrr7 - If I've got $4000 to invest right now, would you recommend starting one Roth with $4000 in it or two Roth IRAs (one for me and one for my wife) with $2000 in each? Does it matter?

From a financial point of view, generally your choices are wider and your fees are lower the more you invest.

From a relationship point of view, your DW may not be happy that all the retirement money is in your name and none is in hers. Talk to her first.

If you're only going to be putting $2000 in, I'd recommend something like a money market, or a 1-year CD (with the best rate you can find -- check out the Online Banking board), and then transfer the money elsewhere when you can add more.

Also, if I open a Roth IRA can I make my initial deposit be for 2005 and have my monthly contributions go towards 2006?

Sure -- just make sure you know the proper procedure for communicating this to your custodian. (Some may just require a note in the memo field of your check; some may want you to use a special deposit slip, etc.)
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If you're only going to be putting $2000 in, I'd recommend something like a money market, or a 1-year CD (with the best rate you can find -- check out the Online Banking board), and then transfer the money elsewhere when you can add more.

I would disagree. For $7, at Scottrade you can put it into an ETF like whatever kind of mutual fund you were thinking of. I think there are also still mutual fund companies where you can start with $2K.

I would also say that if you split the money - $2K each, I would have any additional contributions before April 15 go toward 2005. Whay waste the opportunity ?

rad
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My wife and I have discussed this, the questions I ask are her's as well. We'll be together forever and starting a family soon, so we both agree to get money invested for the long run, in whatever means makes the most sense. Meaning either one Roth IRA or two. I guess we are leaning towards opening one Roth IRA, putting in $4000 initially for 2005 and then making monthly payments towards 2006. From what I've heard here and others outside of this discussion board, it sounds like Scottrade would be a good way to go and then investing our money in a combination of Mutual Funds, ETFs or stocks. All depending on cost distribution etc.

Does that sound like a mistake to anyone? Is there anything with Scottrade that I should be aware of that may not be obvious?

I hope to get this account setup today, but will wait for feedback before making any decisions.

Thanks again, my wife and I really appreciate all of your info!
-Jay
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Meaning either one Roth IRA or two. I guess we are leaning towards opening one Roth IRA, putting in $4000 initially for 2005 and then making monthly payments towards 2006.

Since the IRA can only be in one person's name, I'm somewhat surprised by this. FWIW, I would recommend opening one IRA and putting 4K in, then opening a second one and putting any contributions made before April 15 into that one, and label tham all as 2005 contributions.

This way, if you have a windfall in 2006, you can still make the max 8K (4K per account) contributions. If not, then it doesn't hurt you and you've left your options over.

Also, although you may be planning on being together forever, things can happen, heaven forbid. Also, if your ages are different, having two different IRA's gives you more flexibility if you stay together until your golden years. It also, as already mentioned, gives you more options in contributing greater amounts to IRA's overall.

Seriously, I'm with rad here (no surprise), think about two IRAs, and have all contributions before April 15 be labelled as 2005 contributions.

-synchronicity
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>> Seriously, I'm with rad here (no surprise), think about two IRAs, and have all contributions before April 15 be labelled as 2005 contributions. <<

Agreed -- but just to pick a nit, you actually have until April 17 to make 2005 contributions this year because April 15 falls on a Saturday.

#29
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Is there anything with Scottrade that I should be aware of that may not be obvious?

Scottrade's usual commission is $7 but for certain mutual funds it is $0 and for others it is $16.
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just to pick a nit, you actually have until April 17 to make 2005 contributions this year because April 15 falls on a Saturday.

B@st@rd. ;-)

-synchronicity
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What about the articles I'm reading that Scottrade's eCheck service had been "compromised"? Is this still an issue, are they back up and running with online transactions?

My wife is one year younger then I. We'll open the first IRA in her name, put the max in for 2005 (by April 17th ;) and then put monthly payments towards a second IRA in my name, again for 2005 (until April).

It seems Scottrade's list of NTF mutual funds is lower then other sites, should I be concerned with this in the long run?
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What about the articles I'm reading that Scottrade's eCheck service had been "compromised"? Is this still an issue, are they back up and running with online transactions?...

Why go with a company that have very poor security policies?

TB
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Why go with a company that have very poor security policies?

Vanguard had a security compromise years before Scottrade so beware of that one as well.

rad

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Why go with a company that have very poor security policies?

Vanguard had a security compromise years before Scottrade so beware of that one as well.


Thanks to our "DO NOTHING CONGRESS"!

Thanks rad for the info.

TB
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It seems Scottrade's list of NTF mutual funds is lower then other sites, should I be concerned with this in the long run?

Actually, I'd say that if you're interested in mutual funds, this is more of an issue in the short run than it is in the long run. To pay a $16 commission will hurt a lot more on $2,000 or $4,000 than it would on $20,000.

I like Firstrade because all of its funds are offered NTF. Granted, there are some funds that it doesn't offer, Fidelity for one.

Also, there are funds out there that you can get into for a lot less than $2,000. I've seen some as low as $250.

Ryan
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I've decided to open an account with Vanguard and rollover my 401(k) from a previous employeer into a Vanguard Traditional IRA account, and then convert that into Roth(s). I have roughly $16,000 in my old 401(k). When I start my Roth IRA I think I'll go with Vanguard's Target Retirement 2045 fund (VTIVX) (I'm 28). I'll use the 401(k) money to open two Roths, one for me and one for my wife, contributing 4k to each for 2005 and 2006. Can I open two Roths using the money from one Traditional?

Thoughts?

Will I, should I, be charged any fees for rolling my 401(k) into an IRA at Vanguard?

Thanks again!
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Why go with a company that have very poor security policies?

Many of us were very upset with the way Scottrade handled the security breach. It is still causing me problems.

Firstrade is a better deal for mutual funds. They charge nothing for all of their no load funds, while Scottrade charges $17 for the majority of the popular no load funds (including Vanguard). With 2 different accounts and a couple different funds, you are going to get hit with a lot of extra fees at Scottrade. You will get hit again when you sell.
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