Investment Plan

kurosh · #1 05-10-2006, 02:45 AM

Ok. Up until now I've been wasting money. I've had a large amount sitting in neteller and using only a checking account + debit card. This is what I'm doing now. Please offer suggestions.

- For health insurance, I am getting catastrophic insurance and opening a HSA. About 2k goes here.

- I am going to use firstrade and open a ROTH IRA and max that out. I can open one of these with poker winnings, right? 4k here.

- I'm going to open an ING Direct savings account and put about 4k in there for short-term expenses.

- I am also going to use firsttrade and invest in the vanguard index 500. The rest of what I have goes in there.

- I'm going to apply for the dividends credit card from citibank. I don't know if I need to open a bank account with them or anything of that sort.

As I said, I've been pretty clueless about finances up until a few days ago when I started researching it. It seems like a lot of trouble to have all these accounts and money spread in different places. What is the easiest way to pay off the credit card? I don't want to have to write a check at the end of every month.

IronFly · #2 05-10-2006, 10:28 AM

My bank has electronic bill pay, thats how I pay my bills every month, including my credit card.

IRA contributions must be from earned income. I think your winnings will qualify <u>only</u> if you file as a pro, talk to an accountant.

If you have a good income and want to build some assets, why not talk to a investment advisor? If you get an account at Fidelity or Schwab they provide investment counselors for small/no charge, depending on the assets you have with them. I would not use a broker/transaction-based advisor. Flat fee is the way to go.

RandBriscoe · #3 05-10-2006, 12:23 PM

Citi does not require a bank account to qualify for the CC. I pay it online every month...

kurosh · #4 05-10-2006, 01:12 PM

[ QUOTE ]

If you have a good income and want to build some assets, why not talk to a investment advisor? If you get an account at Fidelity or Schwab they provide investment counselors for small/no charge, depending on the assets you have with them. I would not use a broker/transaction-based advisor. Flat fee is the way to go.

[/ QUOTE ]
Ironfly, would you recommend I open an account with Fidelity or Schwab instead of Firstrade?

IronFly · #5 05-10-2006, 01:47 PM

[ QUOTE ]

Ironfly, would you recommend I open an account with Fidelity or Schwab instead of Firstrade?

[/ QUOTE ]

I'm not familiar with FirstTrade.

I'm a satisfied customer at Fidelity and I like them alot. But of course what I want and need is going to be different from you.

I think a good aspect of Fidelity/Schwab is that they have locations where you can go to hear a lecture, talk to an advisor, get materials etc. and learn about how to make an investment plan. Often a free consultation is part of setting up an account (there may be minimums/other catches, you'll have to check it out yourself). Fidelity does charge more than FirstTrade.

Something you should know about Schwab/Fidelity/brokerages in general: they do push their own funds. But you don't have to buy it if you prefer something different.

I think as long as you take the opportunity to sit and talk with a professional advisor (fee-based) you'll be fine.

Good luck,
IronFly

IronFly · #6 05-10-2006, 01:53 PM

Oh, BTW Kurosh,

Personal finance software is fantastic. Get Quicken or Microsoft Money. One of the best investments I ever made- I'm serious.

mwgr5 · #7 05-10-2006, 02:07 PM

If you have no other equity investments I would not invest in the S&P 500. The S&P is composed only of large company stocks so you are not diversified properly. I would instead invest in a total market index. This would give you greater diversification by exposing you to small and mid cap stocks also.

Dazarath · #8 05-10-2006, 10:08 PM

If you're going to trading stocks a lot, then Fidelity/Schwab/Vanguard will be too expensive because of the commissions. If you're planning to put a lot of your money in mutual funds, then those are good, because they offer a decent selection. I don't know about Firstrade, though.

TTChamp · #9 05-10-2006, 11:43 PM

[ QUOTE ]
- I am also going to use firsttrade and invest in the vanguard index 500. The rest of what I have goes in there.

[/ QUOTE ]

Noob question and potential hijack:

If he is investing in an vangaurd index fund, isn't the best play to just go str8 to the Vangaurd website==>minimize fees?

Dazarath · #10 05-11-2006, 01:48 AM

Yes, good point.