Comments on: How to open a retirement account with $50 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/ Personal finance blog for college students, recent graduates and everyone else -- including entrepreneurship -- for getting rich. Featured in the Wall Street Journal and New York Times. Sun, 21 Mar 2010 11:47:10 -0700 http://wordpress.org/?v=abc hourly 1 By: Jeff http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/comment-page-1/#comment-3302 Jeff Tue, 07 Nov 2006 04:11:34 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50#comment-3302 Lorena: In my opinion, and I'm no financial advisor, you need both. The savings account should be your emergency fund, you should have enough money in there to live, at a minimum, for 4 months should something happen to your job or otherwise. The retirement fund should be opened for your future. The earlier you start, the better - and this point is huge. The interest and compounding gained by starting early is immense. I will also say I'm a huge fan of T Rowe Price funds and their service. I would recommend them to anyone for their mutual funds or retirement funds. Once you have a solid foundation in both of these, then start looking at other investments - maybe short term or long, depending on your situation and where you see yourself in the next 10 years. My .02 -Jeff Lorena: In my opinion, and I’m no financial advisor, you need both. The savings account should be your emergency fund, you should have enough money in there to live, at a minimum, for 4 months should something happen to your job or otherwise.

The retirement fund should be opened for your future. The earlier you start, the better – and this point is huge. The interest and compounding gained by starting early is immense. I will also say I’m a huge fan of T Rowe Price funds and their service. I would recommend them to anyone for their mutual funds or retirement funds.

Once you have a solid foundation in both of these, then start looking at other investments – maybe short term or long, depending on your situation and where you see yourself in the next 10 years.

My .02

-Jeff

]]> By: Lorena http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/comment-page-1/#comment-3301 Lorena Thu, 02 Nov 2006 01:30:52 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50#comment-3301 Hello. I recently started reading this blog. I've gotten some really awesome information, but I have a question. Right now, I have 2 avenues of savings for the future. I have a savings account that has a 5.05% apy and I invest in the stock market. My question is, should I keep my money in this savings account or would it be better to open a retirement fund like the ones mentioned above, or maybe split the money and do both. Any feedback is greatly appreciated, Thanks! Hello. I recently started reading this blog. I’ve gotten some really awesome information, but I have a question. Right now, I have 2 avenues of savings for the future. I have a savings account that has a 5.05% apy and I invest in the stock market. My question is, should I keep my money in this savings account or would it be better to open a retirement fund like the ones mentioned above, or maybe split the money and do both. Any feedback is greatly appreciated, Thanks!

]]> By: kms2 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/comment-page-1/#comment-3300 kms2 Wed, 01 Nov 2006 21:33:19 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50#comment-3300 I own 2 T. Rowe Price mutual funds. They recently updated the account user's page and I absolutely love it. Opening an account online is very simple (an even easier when you open an additional fund account). I have mutual funds at three other companies and T. Rowe Price is my favorite based solely on online access. Out of my other three, I think that Fidelity is the worst. I own 2 T. Rowe Price mutual funds. They recently updated the account user’s page and I absolutely love it. Opening an account online is very simple (an even easier when you open an additional fund account). I have mutual funds at three other companies and T. Rowe Price is my favorite based solely on online access. Out of my other three, I think that Fidelity is the worst.

]]> By: Justin http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/comment-page-1/#comment-3299 Justin Wed, 01 Nov 2006 08:16:36 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50#comment-3299 Ramit, you might find the situation in Australia interesting: <a href="http://en.wikipedia.org/wiki/Superannuation_in_Australia" rel="nofollow">http://en.wikipedia.org/wiki/Superannuation_in_Australia</a> I guess it's like the 401k thing, but it's compulsory for everyone who is working. Your employer has to make a contribution equal to at least 9% of your annual salary. You can also sacrifice an unlimited amount from your salary to go straight into the fund. Contributions taxed at 15% instead of normal rate, 15% on earnings, no tax on withdraw if it's taken out as a lump sum. Its a good system because it creates forced savings. Most people already have savings accumulated at 16, 17 from part-time work that can't be accessed till 55. Ramit, you might find the situation in Australia interesting:

http://en.wikipedia.org/wiki/Superannuation_in_Australia

I guess it’s like the 401k thing, but it’s compulsory for everyone who is working. Your employer has to make a contribution equal to at least 9% of your annual salary. You can also sacrifice an unlimited amount from your salary to go straight into the fund.

Contributions taxed at 15% instead of normal rate, 15% on earnings, no tax on withdraw if it’s taken out as a lump sum.

Its a good system because it creates forced savings. Most people already have savings accumulated at 16, 17 from part-time work that can’t be accessed till 55.

]]> By: Jonathan http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/comment-page-1/#comment-3298 Jonathan Wed, 01 Nov 2006 06:48:35 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50#comment-3298 Thanks for letting me know about this, Ramit. I'm one of those that emailed you about it. Although, I really want to go with Vanguard, so I think I'll stick with my plan of saving up $3,000 in a savings account to start a fund. Thanks for letting me know about this, Ramit. I’m one of those that emailed you about it.

Although, I really want to go with Vanguard, so I think I’ll stick with my plan of saving up $3,000 in a savings account to start a fund.

]]> By: NewbieToNYC http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/comment-page-1/#comment-3297 NewbieToNYC Wed, 01 Nov 2006 04:41:30 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50#comment-3297 I have a T. Rowe Price account, and I really like it. My fund is not a retirement fund, and it's relatively conservative, but it was the first one I bought when I had a little extra money to burn at the end of the month. Trust me: You won't miss the $50 automatic deduction. I don't, and I enjoy checking in on the fund online just for fun to see how much more I'm making than if I had spent that $50 on vodka tonics or something similarly frivolous. I have a T. Rowe Price account, and I really like it. My fund is not a retirement fund, and it’s relatively conservative, but it was the first one I bought when I had a little extra money to burn at the end of the month. Trust me: You won’t miss the $50 automatic deduction. I don’t, and I enjoy checking in on the fund online just for fun to see how much more I’m making than if I had spent that $50 on vodka tonics or something similarly frivolous.

]]> By: keith http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/comment-page-1/#comment-3296 keith Wed, 01 Nov 2006 01:39:37 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50#comment-3296 i'm 45 now, income now 30k in 25 yrs what amount of income would i need (basic living)? any responses welcomed. i’m 45 now, income now 30k
in 25 yrs what amount of income
would i need (basic living)?
any responses welcomed.

]]> By: Savvy Samurai http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/comment-page-1/#comment-3295 Savvy Samurai Tue, 31 Oct 2006 23:42:47 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50#comment-3295 I just opened one this month as well at T. Rowe Price. I am investing in the TRREX since I am lacking this sector in my 401k. I really like the user interface that T. Rowe Price has. Much better than my Fidelity 401k. I just opened one this month as well at T. Rowe Price. I am investing in the TRREX since I am lacking this sector in my 401k. I really like the user interface that T. Rowe Price has. Much better than my Fidelity 401k.

]]> By: Carlin http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/comment-page-1/#comment-3294 Carlin Tue, 31 Oct 2006 22:20:49 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50#comment-3294 For the expense ratio question, you'd multiply it by your total assets. So $11,000 at the end of the year at a 0.76% ratio would be $83.60 vs $23.10 with the Vanguard fund. So over time, the Vanguard fund can offer a big savings. Another thing that isn't included in the expense ratio is trading costs, which are shown in the fund prospectus as a percentage of total assets also. This also reduces your return. For the expense ratio question, you’d multiply it by your total assets. So $11,000 at the end of the year at a 0.76% ratio would be $83.60 vs $23.10 with the Vanguard fund.
So over time, the Vanguard fund can offer a big savings. Another thing that isn’t included in the expense ratio is trading costs, which are shown in the fund prospectus as a percentage of total assets also. This also reduces your return.

]]> By: Roman http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50/comment-page-1/#comment-3293 Roman Tue, 31 Oct 2006 21:02:09 +0000 http://www.iwillteachyoutoberich.com/blog/how-to-open-a-retirement-account-with-50#comment-3293 My Roth IRA is with Fidelity. They let you open one up with $0 balance as long as you sign up for automatic contributions. I'm pretty sure the minimum automatic contribution is $100 though. My Roth IRA is with Fidelity. They let you open one up with $0 balance as long as you sign up for automatic contributions. I’m pretty sure the minimum automatic contribution is $100 though.

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