Comments on: Funding my Roth http://frugalbabe.com/2007/04/21/funding-my-roth/ A rich life without a lot of money Tue, 15 May 2012 15:08:00 +0000 hourly 1 By: FrugalBabe http://frugalbabe.com/2007/04/21/funding-my-roth/#comment-1514 FrugalBabe Sat, 21 Apr 2007 18:49:45 +0000 http://frugalbabe.com/2007/04/21/funding-my-roth/#comment-1514 If I buy a mutual fund that's NOT an index fund, Ameritrade will not charge me a commission. But the expense ratios on non-index funds is typically 2 or 3 times the expense ratios of index funds. By getting three or four ETFs each year, I can still get the low expense ratios (I buy index ETFs), and pay less money over the course of the year than I would pay to buy one index fund. I just hate to have high expense ratios cutting into earnings for the whole time I own the fund. I'm still learning with all this, but it seems that if I don't pay the money up front in transaction fees, I'll pay it in operating expenses for a higher-priced mutual fund as time goes by... Maybe I'll put money into the IRA every four months instead of three. That would give me $1000 at a time to invest, and would mean I'd only pay the $10 fee three times/year. If I buy a mutual fund that’s NOT an index fund, Ameritrade will not charge me a commission. But the expense ratios on non-index funds is typically 2 or 3 times the expense ratios of index funds. By getting three or four ETFs each year, I can still get the low expense ratios (I buy index ETFs), and pay less money over the course of the year than I would pay to buy one index fund. I just hate to have high expense ratios cutting into earnings for the whole time I own the fund. I’m still learning with all this, but it seems that if I don’t pay the money up front in transaction fees, I’ll pay it in operating expenses for a higher-priced mutual fund as time goes by… Maybe I’ll put money into the IRA every four months instead of three. That would give me $1000 at a time to invest, and would mean I’d only pay the $10 fee three times/year.

]]> By: FrugalBabe http://frugalbabe.com/2007/04/21/funding-my-roth/#comment-1512 FrugalBabe Sat, 21 Apr 2007 18:18:18 +0000 http://frugalbabe.com/2007/04/21/funding-my-roth/#comment-1512 But Ameritrade will charge me $50 to buy an index fund in my IRA... They'll let me contribute to the index fund monthly with no fee, but the $50 up front is pretty steep... But Ameritrade will charge me $50 to buy an index fund in my IRA… They’ll let me contribute to the index fund monthly with no fee, but the $50 up front is pretty steep…

]]> By: NCN http://frugalbabe.com/2007/04/21/funding-my-roth/#comment-1510 NCN Sat, 21 Apr 2007 03:34:44 +0000 http://frugalbabe.com/2007/04/21/funding-my-roth/#comment-1510 I've just gotten into using ETF's and Mutual Funds... now that we are debt free! 2 quick points.. if you are going to invest a lump sum at ONE time, say your $4000 for one year, THEN you should buy ETFS... IF you are going to buy in chunks, say $500 at a time, then you should always buy no-load, no-transaction fee Index mutual funds... If you pay 10 dollars out of a $500 purchase, then you've already spent TWO percent! Yikes... so, big, one-time, lump purchases = etf multiple, month by month or quater by quater = mutual funds, no-load, no-transaction fee... NCN I’ve just gotten into using ETF’s and Mutual Funds… now that we are debt free! 2 quick points.. if you are going to invest a lump sum at ONE time, say your $4000 for one year, THEN you should buy ETFS… IF you are going to buy in chunks, say $500 at a time, then you should always buy no-load, no-transaction fee Index mutual funds… If you pay 10 dollars out of a $500 purchase, then you’ve already spent TWO percent! Yikes…
so, big, one-time, lump purchases = etf
multiple, month by month or quater by quater = mutual funds, no-load, no-transaction fee…

NCN

]]>