Comments on See Me Get Rich: Investing for the Absolute Beginner; Part I. Why I...

Hi Ellen, Thank you for your questions about savi...

2010-07-04T22:18:59.460-07:00

Hi Ellen,

Thank you for your questions about savings accounts and investing. You are correct that you must choose your investments after opening the Roth IRA account. Until you have indicated which investments to buy, the money you deposit into a Roth IRA account is usually automatically invested in a money market fund with a variable rate of return.

Although it used to be the case that money market funds yielded several percentage points of return, currently money market funds are paying out at very small rates (if any). Therefore, you should invest your Roth IRA contributions into an index fund such as SPY as soon as possible after depositing the contributions into the account.

Hi Zachary, This is another question from a true ...

2009-06-23T20:25:17.606-07:00

Hi Zachary,

This is another question from a true beginner. I've hit the ripe old age of 22 and I want to open a Roth IRA. When I open the account at the bank, do I then have to choose where the money in this account is invested? For example, would I just get the account number and use that when buying my SPY shares (or whatever)?

Would the Roth IRA simply function as a savings account if I didn't choose to invest it?

Thank you!

Thanks for visiting my site and for commenting, Lo...

2008-03-26T00:57:00.000-07:00

Thanks for visiting my site and for commenting, Lootella. It looks like you're off to a good start with Sharebuilder. Their portfoliobuilder utility can get you started, but you will probably want to diversify a little more once you get going a bit. Take a look at the SeeMeGetRich.com Portfolio Page for a sample diversified portfolio using just three index ETFs. Thanks again for stopping by, and please feel free to offer your thoughts here anytime!
-Zachary

This is one of the best, simple explanations I've ...

2008-03-25T11:06:00.000-07:00

This is one of the best, simple explanations I've ever read on investing. I opened up a Share Builder/ING Direct account and a have a "beginner's portfolio".

See, initially I thought I was opening an emergency savings account but ended up in the porfolio section because I was unfamiliar with the interface.

I'm investing $75 a month in Lehman AGG bond and S&P. I have no idea what I'm doing so your tips will come in handy.

Thank you!