LateInvestor.com

Ramit From IWillTeachYOuToBeRich Is A Roth IRA Fan - Should Every Beginner Investor Be A Roth IRA Fan Too

Posted on the May 26th, 2009 under Beginning Investment Strategy, Mutual Funds, Roth IRA by Jeff the late investor

I find it interesting that Ramit Sethi from http://IWillTeachYOuToBeRich.com/blog/ so prominently mentions that the first thing he does with his monthly paychecks is
1) Automatically deposit into his 401k fund
2) Deposit money into his Roth IRA fund.

Based on what I’ve read from Ramit, this is a guy that really knows his stuff when it comes to personal finance and personal investing. So when, in his post Automating your money — especially entrepreneurs and freelancers , I see him so strongly advocating automatic contributions to Roth IRA funds, it makes me even more inclined to make my beginning investments into a Roth IRA. I still haven’t actually made any investments yet, that should come by the end of this week. I’m not 100% confident inn my understanding of what all is involved in learning how to invest, and as a beginner investor (and a late investor of course), I want to be totally comfortable with what little money I can afford to invest.

Beginner Investor Roth IRA - What Is It, And Should Beginner Investors Get A Roth IRA?

Posted on the May 20th, 2009 under Beginning Investment Strategy, Retirement, Roth IRA by Jeff the late investor

As usual, I am totally surprised by how little I really know about finances: for example, the Roth IRA. I asked my wife if she had heard of it, and she said yes, like ‘duh, of course I havem haven’t you?’ Pretty sad, but if you aren’t familiar with the Roth IRA either, Investing Online For Dummies describes the concept pretty well - here’s why it totally seems like a no-brainer:

The Roth IRA provides no deduction for contributions, but instead provides a benefit that isn’t available for traditional retirement accounts: if you meet certain requirements, all earnings are tax free when you or your beneficiary withdraw them. Other benefits include avoiding the early distribution penalty on certain withdrawals, and eliminating the need to take minimum distributions after age 70½.

Based on what I’ve read so far, this should be one of the first things I pick up. An IRA will have to bolster my small 401K, unless I cash out my 401K to roll it into something better. Not sure yet about that, so I guess just going to hang fire on that.

Next chapter is about choosing an online broker, so I’m pretty excited to see what they have to say about that.