Investing in Your 20′s and How to Avoid the Ramen Noodle Dilemma

As a child growing up, I remember my father constantly eating Ramen Noodles in a Styrofoam cup.

It was pretty fascinating that all you had to do was add hot water, and presto, you had a ready to eat meal in a few minutes.

Perfect for an impatient kid!

As I got older I started to notice that the package of Ramen Noodles still existed in our kitchen.

Ramen Noodle Dilemma

My father had always struggled with money.

He had battled credit card debt and never really made good financial “cents” of his money.

I guess I always just thought that he really liked the cup of Ramen Noodles.

I later found it there was much more to the story.
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Start Saving For Retirement Today: Best IRA Online Brokers

best ira online brokerAs a financial advisor one of the biggest frustrations about our industry is for the young investor that want to get started investing into an IRA.

Why is it frustrating?

Because most big firms don’t want to help new investors.

Otherwise known as “small investors”.

Yes, you can walk into an Edward Jones office and open an IRA, but you’re going to have to pay an annual custodial fee.

They aren’t the only ones.  All big brokerage firms will charge $40-$75 per year just to have the account open.

In addition, some firms will charge you a small account fee if you don’t generate enough commissions or fees or the year.

Over and above that, you’re either going to have to pay a commission for each mutual fund, stock or ETF trade that you place or you have to pay an advisory fee which will be anywhere from .75% to 1.5% of your account balance.

Cha-ching!

As you can see, yes you can open the account with a big brokerage firm, but they’re going to gouge you in fees making it nearly impossible for any new investor to make any money.

So what’s the alternative?
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Best Places to Open a Roth IRA

Do you know what your income tax rate will be in the future?

The answer to that question is key to your retirement planning. If you think your tax rate will be lower in the future then it makes sense to avoid paying tax now through a tax-deferred investment vehicle like a Traditional IRA.

The Roth IRA Movement

The Roth IRA Movement

But with a mounting national debt, many people believe personal income tax rates will eventually be forced to increase.

Even if the national debt somehow gets taken care of, the government doesn’t tend to lower a tax once it is set.

If tax rates are going to go up the best retirement account for you to open if you qualify is a Roth IRA.

You will pay income tax today and never pay income tax on your nest egg again.


Where to Open a Roth IRA

Once you’ve made the decision to open a Roth IRA there are a number of companies that are happy to accept your contributions. The number of options you have can be overwhelming: do you go with a discount broker, a full-service broker, or direct to a mutual fund company?

We’re here to help you cut through the confusion to find the best company to open a Roth IRA with. (Just getting started investing? Check out our Best Online Brokers for Beginners.)
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