Open Roth IRA and invest without sales charges!
Posted Fri 9 Feb 2007 by Brad under Money and Finances
After 3 years of listening too (and ignoring) Suze Orman, my uncle, and everybody in between, I finally opened up my first Roth IRA. I have been saving for retirement ever since I started working, but have just been dumping money into my (old) company’s 401k. I was saving for retirement, it was easy, and I didn’t want to take the time to learn about and open up a Roth.
One the of the ideas I’ve been toying with is renting out my condo in a year or two and buying a new one. Unfortunately, I don’t have anything saved up for a down payment for the second condo. If I had opened up a Roth IRA, I could take 8k or so out from the last two years without penalty. Oh well, hindsight…
Anyways I decided to go with Ameritrade. I opened up my account December 15th or so and in doing so, got 45 days worth of free trades! This works out great because I want to go ahead and buy actual stocks rather than mutual funds. 75% of my current 401k is in mutual funds with the rest in my company stock.
The best part is that since I opened it up in December, I can get 4000 in for 2006 and 4000 in for 2007 in January. I’ve bought 8 different stocks just a few stocks every day, trying to do some mini dollar-cost averaging through the free trades although the time period is pretty short.
Also, I did have some of the cash, but the rest I carefully fronted with the infamous Citibank 0% balance transfer with no transaction fee into my checking account.
I know its ballsy to put all my money in over a month and a half when the market is at an all time high and an uncertain 2007 on its way. However, with the $10 fee to buy stocks, I can’t help but feel I might be better off buying all the stocks now without any fees. When I’m investing only 1000k in each stock, the fees add up, especially since I don’t want to buy all of the same stock one in purchase, but rather a few small ones to average out.
Ameritrade still has the offer so if want to dollar cost average and trade for a month and a half, do it!
Technorati Tags: Suze Orman, Roth IRA, 401k, saving for retirement, Ameritrade, dollar-cost averaging
