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Where to Open a Roth IRA Account

Alrighty, you're sold on what a great investment a Roth IRA is, but now you're stuck on how to open a Roth account.

Relax. It's a snap.

Remember, as I explain in the book ( see p. 192) a Roth is simply a type of account. You open a Roth IRA account at a discount brokerage or a no load mutual fund company. Notice I said discount brokerage and no-load fund company. Saving on the cost of investing is one of the most effective ways of making money. So I don't want you using a full-service brokerage, or paying a sales load on a mutual fund.

When you set up a Roth IRA account you must choose a specific investment for that Roth. It can be any combination of stocks, or funds. My advice is to keep it simple and simply opt for a no load index fund. With an index fund you get a broad investment in hundreds, if not thousands, of stocks. That's a great one-stop way to get stock diversification. Or you can use an Exchange Traded Fund, which works just like an index fund but offers you a bit more flexibility. Just remember that you don't want to be making too many periodic investments with an ETF because you will need to pay a brokerage commission with each purchase. (No load funds don't charge a commission.) For more info on funds and ETFs, click here.


You can call up any discount brokerage or no load mutual fund company-or head to their website)-and get the application to open a Roth IRA. Below is contact info.

The one catch here is that there are typically initial minimums you must fork over to open an account. The good news is that brokerages and fund companies lower those minimums for IRA accounts, so they can be as little as $500-$1,000, or so. But also check if you will get dinged for any annual account maintenance fees.

 

Now if you don't have $1,000 ready to invest, don't give up. Ask the brokerage or fund company if you can qualify for an even lower initial minimum investment if you agree to make ongoing investments, rather than one lump-sum investment. For example, at the T. Rowe Price no-load fund company, the typical Roth IRA minimum is $1,000. But if you sign up for the Systematic Purchase account, where you agree to make an investment every month your minimum drops to just $50. That's YF&B friendly if you ask me.

NO LOAD MUTUAL FUND COMPANIES

NO LOAD FUND COMPANY TELEPHONE
Fidelity 800-343-3548
T. Rowe Price 800-225-5132
Vanguard 877-662-7447
DISCOUNT BROKERAGE TELEPHONE
Ameritrade 800-343-3548
Sharebuilder 866-747-2537
Muriel Siebert 800-872-0711


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