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Does anyone here know of some good precious metals index funds and mutual funds? (funds in precious metals companies)? That is, funds with low expense ratios, preferrable low or no load.

Your right, John...some of the sources on my previous list are probably beyond what a beginner wants...thus, my condensed list of books and websites: The Road to Wealth Personal Finance for Dummies. This is a new one I found on Amazon; I'm not putting it here to be insulting. The "for dummies" series of books is great for an introduction to any topic, I used it when I first started using Linux. Fool.com Fidelity Investor's Weekly Note: You can use Half.com when buying books if the book you want is available there. Personal Finance for Dummies is available on Half.com as is The Road to Wealth. If you buy from Amazon, look at their used-books offerings for discounted prices. (a financial book is a financial book, whether it has a few scuffled pages or not).

I'd say that if you are an individual investor, you should be very knowledgeable about the companies you invest in. If you actually know something about the company, and invested in it for good reason, a short-term loss won't bother you. Whenver investing in a company, you should know some information about it's current financial position, cash-flows, income, customers, competitition, suppliers, and level of government-regulation. You should know about how satisfied the customers are, how afraid the competitors are, and how impressed the supplier are. You should know how competent the management is, how good the R&D unit is, how satisfied employees are, the current status of union-relations (temporary crises, like strikes, are often good times to buy good companies). Furthermore, you should be able to explain why it is you think <I>this</i> particular company is going to grow more than it's competitors. For these reasons, I think Warren Buffet has good advice for the personal investor. When you start investing, you get a card and 20 punches. After that, you're done. Now, you probably aren't going to invest in a lot of companies very quickly, but you're probably going to make better investment decisions.

I don't share John's disapproval of Suze Orman (though I do agree there's lots of self-promotion, and if you listen to her show, her voice can seem rather nagging). However, her FAQ on financial affairs, The Road to Wealth. It covers a wide array of topics in a easily understandable manner. There aren't other books by Suze Orman that I recommend: all of her other books are basically redundant with and inferior to The Road to Wealth. I also don't recommend Kiplenger's, or any other financial magazine, for that matter. A waste of money, imo. Most of the stuff is ads, and a whole bunch of the information is completely irrelevant to the personal investor. I remember one issue of Kiplenger's talking about a wealthy family that had used off-shore trusts for years to avoid taxes, and how now things were falling apart due to family-conflict. My question is, who cares? How is learning vaguely about these loop-holes that used to be useful, but no-longer are, and are now closed, and learning about the history of one family that exploited them going to help me? My advice to learn about financial matters is to use the internet. There is so much good information that you can get for free. Here's my recommendations for web-sites and books: The Road to Wealth Common Stocks and Uncommon Profits and Other Writings The Intelligent Investor Security Analysis: The Classic 1940 Edition The Interpretation of Financial Statement American Association of Individual Investors Fidelity Investor's Weekly RothIRA.com Fool.com FinancialSense.com Quicken.com Software: Various software-programs can help you track your personal finances. For Windows, the only ones I know of are Microsoft Money and Quicken. Each of these programs seems to get worse and worse with each edition (just take a look at the reviews from one year's edition to the next year's). There's also QuickBooks, a real accounting program, which uses double-ledger accounting, but this program is expensive (over $100). If you use GNU/Linux, you can use GnuCash, a free double-entry accounting system. (if you use GnuCash, I recommend installing it using your distribution's package-system).

The IRS' web-page on the retirement savings credit can be found here. A slightly better explanation (which explains that the income limits are per AGI) can be found here.

The minimums may vary depending on the type of account and mutual fund. I believe Fidelity now has an option where you can build an account starting from $0 if you use consistent dollar-cost-averaging. Outside of that, minimum initial contribution amounts typically range from $1,000 to $3,000.

Generally, a Roth IRA is probably the best bet over the long-run. There are many advantages to a RothIRA. If you have significant growth, the growth won't be subject to federal taxes (whether or not it is subject to State taxes varies from state to state. You can always withdraw your principal. Furthermore, especially at this point in time, a Traditional IRA is, I think, a bad idea. The national debt is at very high levels and inflation (increase in monetary supply) is running at 10-15% annually; all this means a likely chance of much higher taxes later on to pay off all of our national debt. Tax-levels right now are relatively "low" <cough>, and are likely to go up no matter what. I would recommend opening an account with either Fidelity, Vanguard, or T.R. Price. These are companies of solid long-standing reputation. Fidelity offers a huge array of mutual funds; Vanguard, index funds with unbeatably low expense ratios; and T.R. Price, some excellent funds. This website lists State-treatment of Roth IRA distributions. It also says which States have no income taxes (not too many of them, unfortunately). PS: You definately do not want to have your Roth IRA invested conservatively, as is your money in your bank. This is money that should be invested for the long-term (retirement); thus, you should be willing to accept more short-term volatility in exchange for greater long-term profits.

roth_ira_questions: Fidelity Spartan Total Market Index Fund charges an expense ratio of 0.25%, which is how much of your investment they will take as a service-fee each year. There is an additional short-term trading fee of 0.50% if you switch funds within 90 days. This should not be an issues, however, since you should never do that. However, Fidelity Spartan Total Market Index Fund requires a minimum initial investment of $15,000 dollars. The word "Spartan" means sparse, which usually means a "sparse expense ratio"; in general, you only get a special deal if you have a lot of money to invest. If you cannot put in a minimum of $15k to start out, you aren't eligible for this fund. Looking at Fidelity's website, it seems like almost all of their index funds are Spartan funds, and even then still have higher expense ratios than Vanguard's regular investor class index funds. Thus, I do not recommend considering Fidelity if you are looking for an index fund, or retirement YYYY fund. Vanguard Total Stock Market Index Fund Investor Shares charges an expense ratio of 0.20%. If you plan on having that mutual fund in a Vanguard Roth IRA, they charge a yearly custodial fee of $10 for each fund having a balance of less than $5,000. The fee is waived if you have more than $50,000 worth of assets with Vanguard. There is also an quarterly fee of $2.50, deducted from your funds distribution-dividents; the fee is waived for accounts with less than $10,000. You may be able to get Vanguard to waive the fee by asking. I would personally never invest in a fund with an expense ratio of more than 1%, except under very exceptional circumstances. That I've seen, none of Vangaurd's funds have expense ratios of more than 1% (in fact, almost all of them are below 0.5%). So, my advice to you if you're looking for an index fund and are concerned with expense ratios is to look no further than Vanguard (unless John or someone else here knows of a company with lower expense ratios than Vanguard, though I highly doubt such a company exists). I do not recommend splitting your assets beween an S&P500 index fund and a Total Stock Market index fund, since they largely over-lap (their performance has historically been almost the same, and the S&P500 is largely represented in teh TSMI). I recommend that you stick with the S&P500 if deciding between the two of them, since Vanguard's S&P500 has lower expense-ratios (and the S&P500 has slightly outperformed the TSMI over the long-haul). I also don't recommend splitting between the S&P500 and the Target 2045 Retirement fund (as it has a large component of S&P500). The one thing to remember regarding the Target 2045 Retirement fund is that it is generic. How close does its change of assets over the years meet <I>your</i> needs? Do you think you're going to retire in 2045? Does its shift of assets from stocks to bonds seem too conservative for you, or too aggressive for you? If you think that 2045 is approximately when you're going to retire, and you think the fund's strategy matches up well with you, then you will want to consider it; otherwise, probably not. It is possible to swtich your Roth between different companies, but it's a pain.

John's post makes some good points, but I wasn't referring specifically to Fidelity's retirement YYYY funds. Whenever you are looking at mutual funds, and find two with similar attributes, you should go with the one with a lower expense ratio. Vanguard also offers retirement YYYY funds, which compare favorably to those offered by Fidelity. In general, whenever you are considering index funds, Vanguard is probably going to be the best company to go to. An index fund is an index fund, and pretty much the only thing that should be different from one index fund to another is the expense ratio [assuming the two index funds are indexing the same thing; e.g., S&P 500 index fund should invest exactly the same in ML, Fidelity, Vanguard, T.R. Price, etc except for the expense ratio). Merril Lynch index funds are terrible in that respect. Fidelity is very good in that respect, but Vanguard is simply the best with regards to low expense ratios (which is why I always include them along with Fidelity for investment options; note, ignore the performance numbers in that chart, they are not up to date). As can be seen, there are no Fidelity index funds that have lower expense ratios than equivalent Vanguard index funds. Albeit, Fidelity S&P500 at 0.19% is not far behind Vanguard S&P500 at 0.18%. Vanguard Target Retirement 2045 Fund. Fidelity Freedom 2040 Fund. You will find that Vanguard's retirement fund has an impressively low expense ratio, which largely mollifies John's concerns. That is, if what you want is such a fund. Regarding the fund-searching tool, I suggested Fidelity's one because it is the one I've used. Vanguard also has a fund-searching tool, which in some respects is easier to use (more simple).

roth_ira_questions, I would stick with Vanguard and Fidelity. Fidelity offers a huge range of options for investment in its own funds, and in funds of other companies through its "Funds Network". Vanguard doesn't offer nearly as many funds, but what it does offer is funds at a very low price (low expense ratio). Fidelity offers a great tool for researching Mutual Funds from their website. Click on the link, then when you get to the website click on Advanced Search and sift through the options. Depending on your goals, if your just getting started and if you don't want to pay much attention to your mutual funds, you might want to consider just investing in Retirement YYYY funds (Retirement 2020 fund, retirement 2060 fund, etc). These funds automatically manage the ratio of stocks:bonds at appropriate ratios as you approach retirement.

IRAnewbie, Like John said, it's great that you have so much money to invest for a teenager. And the sooner the better. Time lost is irrecoverable. You do need some kind of emergency funds on hand, in case of a disaster. However, I'd recommend that you first try to max out your Roth IRA contributions. You can add money to your emergency fund any time you want, but for the Roth IRA, you are limited to 3k a year; so if you miss contributing the max one year, that's it -- you're done, and there's no opportunity to make it up. So, max out your RothIRA contribution and then start scrapping together as much money as you can for an emergency fund. You should note that you can always withdraw the total dollar amount of your contributions to a Roth IRA. However, you should not think of Roth IRA funds as emergency funds that can be tapped. You should think of it as retirement funds. For the most part, if you can live without tapping into your Roth, then you shouldn't tap into it. If you get in a situation where you literally don't have enough money to survive, and where you would otherwise have to borrow money at very high interest rates, then it might be worth considering (consult a financial planner if you ever have to cross that bridge). Another thing to consider is that you never know *if* you're going to have enough money from your job to contribute to a RothIRA next year, or the year after, or after. So, I suggest that, in as far as possible, you put aside as much money <I>right now</I> in a money-market fund as you can for future contributions to a Roth. Right now, the US government is in an enormous amount of debt, and it's very unlikely that taxes are going to stay as low as they are now; when taxes are raised, that will cut into your ability to fund your retirement. Thus, you should plan for that now (money you put aside now in a "taxable" money-market is only taxed on gains). In any respect, maxing out your RothIRA contributions is a good idea. Because I'm not too optimistic about the market right now (inflation, an increase in the monetary supply, is rampant), I would suggest using caution when investing. Some good website to look at: FinancialSense.com RothIRA.com Fidelity Investors Weekly Kiplenger's magazine is pretty good, although it includes lots of fluff (ads and irrelevant articles), but most websites include fluff too.

John, Thanks. That makes sense, since it is prices that determine costs, and not costs that determine price.

Thanks for the responses. Now that I think of it, it doesn't matter for Fidelity, since they aren't charging Roth IRA fees anymore. It's too bad you can't pay the expense ratios from outside of the fund (that would allow your tax-sheltered money to grow faster). But, at least some custodians allow you to pay the Roth fee outside of the Roth.

Regarding the yearly fee for maintaining a Roth IRA and the expense-ratios for mutual funds within a Roth IRA, do they have to be paid for from within the Roth IRA, or can they be paid for from outside of the Roth IRA? I was talking to a Fidelity representative who said the former, but the application forms for Tocqueville say that they can be paid for with money from outside of the Roth IRA.

I'm receiving tuition benefits for coures at the University of Rochester. The tuition benefits form says that the value of the course received as a benefit may be taxable, if the course is a graduate level course. The courses I'm taking are graduate level courses. Under what circumstances are they taxed?

I did a web-search for Pub 15, Circ E, and found this document. However, it mentions nothing about the witholding rate and taxation rate of PTO hours (the document does not have the words "time off" or PTO in it).

Any answer to this question, from an administrator at the Univ. Rochester MC: I just found out through an employee (who's on bi-weekly pay) that the PTO dollars are taxed at a higher rate than normal weekday hours. He's decided that because of this, he's going to have his PTO deferred to his tax shelter at the end of the year. He had heard about this and I told him he should confirm this with HR, which he did. What do you think? Are they taxed higher when they're paid out at the end of the year, or as the hours are used during the year? I was asked about this, and would venture that when they're used during the regular year, they are used in place of normal hours pay, for time-frames when you go to the doctor, etc; thus, during the regular year, they are not taxed extra. However, if you don't use any PTO, and take it at the end of the year (unless you put it in the 403b), it would be extra hours, and probably taxed like a higher rate. Is this correct? If anyone has the details on this (I did a Google search, but it was non-informative), please provide some refs.

I would suggest at least funding your 401k up to the point such to max-out your employer's contributions. Then, I would suggest considering maxing out contributions in a Roth IRA or Traditional IRA, depending on your situation (with preference towards a Roth). After those are maxed out, contribute whatever you can in addition to your 401k. Also, don't assume an 11% rate of return, and assume you're going to live to be 120 or older. Simply because various investments ahve returned 11% average over the past so-many years doesn't mean they'll do so indefinately (indeed, there is much reason to be pessimistic, given inflation, regulation, intervention, and taxation). Also consider simply not retiring, but changing jobs to something that you can do relatively leisurely, but that will provide needed income. Retirement is not a "natural institution", but it was created in the 1900s. Indeed, it's a loss to society that many individuals retire during the years when they're the most knowledgeable and the most productive.

Ah, I see. That was my guess, because multiplying the number by 27 gave 13k. Thank you very much.

On my employer form 403b withdrawal form, I checked off the option stating to max out 403b contributions, which should mean $13,000 contributed a year, or $500 every 2 weeks ($500 x 26 = $13,000). Yet, when I get my paycheck, it says it only deducted $481.48, which would only contribute $12,518.48 in 52 weeks. Does anyone know what's going on here?

akscott, As a prelude, have a look at this series of articles on IRAs. You're in a good situation. If you convert the entire Traditional IRA to a Roth IRA, you will be taxed as if you're in the 33% tax bracket. Only considering the Federal Income Tax, you will pay $35,717 + 0.33 * ($200,000 - $146,750) = $53,289.5 However, you may not want to convert all of it at once. You can avoid taxes by rolling over portions of it over several years. This would minimize your tax liability, as the rollovers would be taxed in smaller tax brackets (with smaller %). Two things you may want to consider when rolling your money over to a Roth IRA, outside of taxes. (1) Roth IRA's may not enjoy the same creditor protection enjoyed by Traditional IRAs in all States. Check your State's laws on it. If you aren't insolvent, it shouldn't be a problem. (2) The State has the power to retroactively eliminate the advantage of a Roth IRA. This may not be constitutional according to proper readings of the Constitution, but it wouldn't be the first time the government's acted unconstitutionally, and it wouldn't be the first time retroactive laws were enacted. They have tanks, we have blanks. Thus, they can do whatever they want. These are risks you'll have to decide to take or not to take.

WDIK, No problem, I wasn't being very clear. First, let me say that 90% was probably an over-statement...that's just the rough guess Fisher estimated one's accuracy would be in picking out exceptional growth companies using his methods. Some examples to verify this from Fisher's investment history include Texas Instruments, which he bought before it went public and Motorola, along with Food Machinery. He bought these companies very early on, and thus experienced enormous gains (percent gains breaking into the thousands per decade) as they became giants. A company that meets and continues to meet the 15 points Fisher laid out in Common Stocks and Uncommon Profits will never be a loser. That's the success that can be had using Fisher's methods. The validity of Fisher's approach can be seen by considering his attitude towards selling: "If the job has been correctly done when a common stock is purchased, the time to sell it is -- almost never." As for Graham's methods, Warren Buffet's essay, The Superinvestors of Graham and Doddesville shows how that method is a sure-thing to work over the long-term. The "dog" (Ruane) of the group of investors that Buffet referred to averaged 17% a year. Interestingly, John Maynard Keynes is listed, and had exceptional results as well, which goes to show that even the biggest idiot and most evil immoral man (aside from Hitler, Stalin, and FDR) of this century can have success using Graham's methods. can have. Keynes, if you don't know, was responsible for most of the misery and government-intervention in the free market over the last century. But, he proved able at following Graham's approach to investing. As for the company that makes 80% a year, you can refer to Gene Callahan's lecture at the seminar on boom, bust, and the future at the Mises Institute: Financial Economics for Real People. It's only available in audio format, so it will take you 26 minutes to listen to it. A really great lecture. That site, Mises.org audio has a whole bunch of great lectures on it, but that's the only one explicitly about investing (though many deal with correct explanations of the business cycle). PS: I do not advocate other forms of investing than Fisher's and Graham's disciplined fundamentals appraoches (understanding the quality of the company, it's financials, and how under- or over-valued it's stock is selling) for individual investors. The approach that Callahan lectured on is not something you can do at home. It requires programmers and constant monitoring to modify their market-models of what's going on. For the individual investor, especially the investor who does not dedicate 40 hours a week to it, the efforts and constant attention required to engage in anything other than long-term buy&hold is prohibitive. Furthermore, it's largely a waste of time for the individual investor; better results can be had using long-term approaches.

Your getting ripped off, big time. Fidelity charges $0 for a Roth IRA. Vanguard charges $10 per YEAR for each Roth with less than $5,000 (they waive that fee if you have more than $50,000 invested with them). You should move to one of them (I'd say Fidelity, due to it's massive number of options, and it's Funds Network, which allows you to invest in funds from many other fund-families without extra charges, though not in Vanguard without paying a charge).

I've been away from this discussion for a while, but I think the stuff on short-term trading is non-sense. Think of what could have been accomplished if all of the time and effort wasted in trying to predict the market (and, coincidentally, the effort trying to tamper with the market) were directed towards more productive affairs. I also disagree that one investment style won't work all the time. That statement may apply to models of investing (there is a company that usually makes 80% a year based on very short-term models involving mergers...during very short time-frames, and in specific conditions, the market may act similarly to equilibrium...but the market is <I>never</I> really in equilibrium). John, Some investment styles will work no matter when you use them -- which are the investment styles that have been used by Fisher and Graham. The reason they work with such exceptional percentage (say 90%) over the long run is that they rely on detailed fundamental analysis that most people simply cannot or are unwilling to do. Thus, they discover inefficiencies, where a companies future growth hasn't been completely discounted, or where it could be purchased with a margin of safety (due to an undervaluation). This is also a very strong argument against the hogwash known as "efficient market theory". If "efficient market theory" was true, then there wouldn't be large variations in the returns generated by stocks -- they would all be relatively even. Furthermore, the existence of arbitrage completely demolishes EMT. I agree with your advice on index funds. They are a great way to invest for someone who wants to put in the minimum effort (because you don't have to worry about changing managers). However, the reason they're profitable is because of "efficient market theory", as Bogle asserts.

I agree with John G. You should learn about investment first, before you start buying individual stocks and bonds. If you don't even understand how a Roth IRA works -- and there are numerous sources on it, including Fidelity.com, Fool.com, and RothIRA.com -- it is unlikely that you understand stock investment. Until you've read some of the seminal works on investing, like Common Stocks and Uncommon Profits and Security Analysis (or The Intelligent Investor), you shouldn't consider investing in individual stocks, not anymore than the layman would consider trying to write a computer program in C. Once you do understand the fundamentals of both value and growth investing (and thus will obviously have an idea as to how to combine them), you should then only invest to the degree that you have the time to make intelligent decisions. Most people work 40 hours a week, 8 hours a day, at least. They also sleep 8 hours. That leaves only 8 more hours. Of the remaining 8 hours, about 2 hours will most likely be used on daily activities that must be done every day (small things like eating, showering, etc). Of the remaining 6 hours, speaking optimistically, people have time for leisure, or whatever they please. Anyone wishing to invest in individual stocks must understand that the effort needed to invest will eat up substantial portions of that time, and that's only to get one or two stocks that are of decent prospects. How many people are willing to give up the time they would spend relaxing, spending with family or partner, or just reading leisurely to pour over financial statements and actively pursue the business grapevine by personal interviews? Investing takes time. Speculation, on the other hand, can be done with the aid of a computer program and a couple of minutes a day. The poor results that proceed from such are predictable.