Roth IRA FAQ, Income Streams and Financial Q & A @ The Carnivals

by Silicon Valley Blogger on December 3, 2008

I may have some pinch hitters here the next few days (guest posts maybe? But we’ll see…) since I may be a little busier than usual as I’m going to play host to a guest I’ll be having for the rest of the week. I’m pretty excited about it because this is the first time I’m playing REAL LIFE host to another personal finance blogger — Cap, from the very entertaining Stop Buying Crap, will be swinging over to our neighborhood tomorrow so I’ve invited him over for a short stay at our house as he visits the financial startup BillShrink on business. I actually live quite close to BillShrink’s headquarters, so I figured it would be great to house Cap and exchange some blogging ideas while he’s trapped in my clutches… Muahaha! ;)

Cap and I first got acquainted when we were both working for Mint.com; I got to know him better when we got together for the finance blogger convention in San Francisco earlier this year, where personal finance tools were the hot topic.

Anyway, it should be fun.

As for other financial bloggers, they’ve got lots to say:

Personal Finance Reads

  • Gather Little By Little: Ask him anything! Nice financial Q & A by Glblguy.

  • The Sun’s Financial Diary: Fidelity is reopening their Contrafund and Low-Priced Stock Fund. Out of all my holdings, Fidelity funds have done the worst so I wouldn’t be surprised if they’ve gotten hammered by an exodus of account holders and now have the room to accommodate more customers.

  • My Dollar Plan: More on the Roth IRA. My tax guy hates the Roth for some reason. He thinks it’s not worth doing conversions to the Roth as he believes that tax laws can change anytime in the future, when you start needing to do withdrawals. He suggests that the government can potentially disqualify the tax benefits of a Roth IRA one day. By this reasoning, my tax guy is pretty allergic to after-tax programs. ;) What do you think….nonsense?

  • Money Smart Life offers some recommendations for how you can save money at the movies!

  • Insight Writer gives us a nice piece on how to strengthen friendships.

  • Funny About Money talks about turning what you love to do into a second income stream. Timely advice!

  • No Debt Plan: Kevin successfully spends $500 on Black Friday.

  • American Consumer News: I wasn’t aware of this, were you? There’s some controversy with oil company prepayment programs that allow customers to lock in the cost of heating oil during the winter months. As oil prices go down, some customers of these prepayment programs are stuck with their higher locked-in costs. Why lock in then? Looks like any cost savings are a wash.

Recent Carnivals

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Categorized under: Money Articles, Silicon Valley & Family Life

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Risk Tolerance, Mutual Fund Expense Ratios, Our Money Blogger House Guest
December 7, 2008 at 6:37 pm

{ 8 comments… read them below or add one }

1 Curious Cat Investing Blog December 3, 2008 at 4:02 pm

I think Roth IRAs are great for investors. While there is a risk tax laws could be changed in a way detrimental to Roth IRA holders this risk is much smaller than the risk that tax rates will increase, in my opinion. If Tax rates increase, and everything else remains the same, (and your investment increases) Roth’s will provide better investment returns.

Still I would suggest hedging the Roth IRA risk by not having my entire retirement savings plan based on Roth IRA and 401(k) investments. But in general, I believe, Roth type investments are under-represented in people’s portfolios not over-represented.

2 Silicon Valley Blogger December 3, 2008 at 4:19 pm

Thanks for your thoughts, Curious Cat. I can always count on you for a great opinion. I actually argue with my tax guy a lot about the Roth, and in the end, he says he’ll convert our stuff if we insist, but he sure is discouraging.

I do like your idea of “hedging” though. Just like with everything else, it makes sense to diversify your funds into various retirement plans, I suppose. Roth IRA limits may prevent me from putting all my eggs in one basket anyway.

3 Funny about Money December 3, 2008 at 4:39 pm

Thanks for the mention! And have fun in “real life”!

And BTW, IMHO Curious Cat’s remark (above) is right on. You need some money invested in low-overhead instruments such as Vanguard or similar funds that yes, are taxable, but no, don’t depend on whatever quirks some future Congress cooks up. I’m also beginning to suspect that ordinary CDs (in the form of CD ladders) should play some part in a long-term investment strategy, even if you’re a younger investor.

4 Cap December 3, 2008 at 10:13 pm

Wooo crashing at another blogger’s house. This act alone will propel me to true net denizen status. Catch you soon.

5 Vincen Scordo December 4, 2008 at 5:24 am

I’m so happy that CDs, money market accounts, and plain old cash are getting some respect.

There is nothing like cash – even if it’s only earning between 3-5 percent.

Roth is great if you don’t exceed the income reqs, but I also like Vanguard index funds (low cost).

Here’s a simply formula: 30 percent in bonds, 25 percent in cash, and 45 percent in index funds. Keep it simple!

Vince Scordo

6 DES December 4, 2008 at 6:05 am

You guys sound like your having too much fun for stodgy old financial guys!

7 No Debt Plan December 5, 2008 at 8:42 am

Thanks for the link love — if you need any guest posts I’d be glad to help.

8 vardis December 5, 2008 at 12:15 pm

In the current climate, I would be surprised if anyone was looking to invest in anything with less than 100% guarantees.

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