Expert: Paul Henneman - 2/22/2006

Question
Dear Paul Henneman:

Thank you for your response. Can I assume that stocks and mutual funds are an option as well? Are online brokers like e-trade and Ameritrade the best low-fee route to take?



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Followup To
Question -
Dear Paul Henneman:

I'm a 20 year old who works for his parents. Can I open and contribute to an ROTH IRA even though I do not have any offical income?


Cordially,

Ken
Answer -
Ken,
  Thank you for your question! Yes, you can open a ROTH IRA regardless of income. In fact, it is a wonderful idea for you to do this now. The longer any funds you are able to deposit can grow, the better off you will be. You can always increase your contributions in the future. Keep in mind that there are limits to how much you can contribute each year.
   Please do not hesitate to follow up with me if I can be of any further service. For example, if you need any advise on how to actually set up the ROTH IRA account, I would be happy to provide some information, along with some services that I would recommend.

Sincerely,
Paul Henneman
President
ValuEngine, Inc.
www.ValuEngine.com
www.VEReports.com
www.VEInstitutional.com


Answer
Ken,
  Thank you for the follow up question! Yes, stocks and mutual funds are both options as well. Since you can hold stocks and/or mutual funds in a Roth or regular IRA, the best scenario is to set up your stock portfolio or mutual funds as a ROTH or standard IRA. If you contribute the maximum per year to that account, then you can set up an additional individual portfolio to hold additional stocks and/or mutual funds outside of the IRA.
  Online brokers are the cheapest way to either set up a ROTH  or regular IRA, or individual investment account. However, some online brokerages are cheaper than others. Etrade and Ameritrade offer some more services like fast trade execution and some research materials, but are typically a little more expensive than some other services. www.FOLIOfn.com or www.Scottrade.com are two that are perhaps among the least expensive online brokerage firms that I have seen.
  I hope this helps! Please do not hesitate to follow up with me if I can be of any additional service,

Sincerely,
Paul Henneman
President
ValuEngine, Inc.
www.ValuEngine.com
www.VEInstitutional.com
www.VEReports.com