PT Money » Investing and Retirement

TradeKing Online Stock Broker Review

Michael — Fri, 27 Aug 2010 18:30:54 +0000

Trading stocks online for the first time can be a scary venture, especially if you’re not familiar with what an online stock broker can offer. One of the leaders in cheap stock trading is , a company that’s been around since 2005 and is based in Boca Raton, Florida. TradeKing has always offered one of the lowest commission rates in the business and touts many awards from Barrons and Smart Money for their overall experience. Let’s take a closer look at what TradeKing is all about.

TradeKing Sign Up Process

Signing up for a account is simple and takes about five minutes. You’ll be taken through five different pages, each of which requires a bit of personal information as well as questions on how experienced of a trader you are. Once completed, you will not be given immediate access to TradeKing as your application is sent for approval. While I’m not entirely sure what would prevent you from opening an account, a credit check is not pulled, so you can breathe a little.

TradeKing Commission Structure

In terms of pricing, TradeKing is one of the best around, especially if you need a broker to help you out. $4.95 trades whether made online or through the help of a licensed TradeKing broker and $0.65 for every options contract. If you are trading penny stocks (meaning stocks valued at under $1.00) you will be charged an extra $0.01 for every share traded. The low price is one of the best available and it’s only one of the very many reasons to open a account.

TradeKing Customer Service

I decided to test out all areas of customer service and here are the results

TradeKing Live Chat – I was connected with an agent 5 seconds after clicking on the live chat link and was informed that the live chat feature is available from 8amET – 6pmET Monday-Friday.
TradeKing Telephone Support – Again, I called their toll free number (877) 495-5464 and was immediately connected to a live agent. Service hours are the same as live chat: 8amET – 6pmET Monday-Friday.
TradeKing Email Support – Emails can be sent in anytime but understand that responses will come at the same time telephone and live chat services are available. This means if you email TradeKing late on Friday, you will most likely receive a response the following Monday.

TradeKing Trader Network

TradeKing has a feature that few online stock brokers have and that’s a network designed for interactive traders. The TradeKing Trader Network is made up of all TradeKing account holders and offers assistance and educational tools to help you make the right portfolio decisions.

To help you out even more, you’ll find a list of 22,000 TradeKing account owners and the transactions they’ve made this year! The list is ordered by number of trades but you can also order it based on stocks owned, number of groups they belong too or number of blog articles they’ve contributed.

TradeKing Awards and Accolades

Visiting the page has designated for recent awards, you’ll find 14 current accolades, mostly from Smart Money and Barrons. Their five most recent awards are:

#1 Customer Service – Smart Money 2010
#1 Options Trading – Barrons 2010
#1 Customer Service and Tools – Smart Money 2009
#1 Options Trading – Barrons 2009
Leader in Website Speed and Availability – Gomez 2009

TradeKing Overall Customer Satisfaction

When you take a look at everything TradeKing has to offer, they stack up against any online stock broker and especially those that offer cheap stock trades. Their commission structure, customer service and trading tools are as good as anyone else in the business and for a limited time (expires August 31st) they’re offering a free $50 just for signing up and making a deposit.

To check out our $50 TradeKing promo page, follow this link!

If you’re in need of a new online stock broker, you should seriously consider all that TradeKing can provide for you.

TradeKing Online Stock Broker Review is a post from: PT Money: Personal Finance by PT.

2c3ca6358dbd4ad8b0c3714b040d53d9

Lending Club IRA: Add 9.5% Returns to Your Retirement Account

PT — Thu, 26 Aug 2010 19:12:56 +0000

Lending Club, the peer-to-peer lending community is now offering no-fee retirement accounts. Now your peer lending investments can have a tax-advantaged status through a number of different self-directed IRA accounts. Lending Club investors have earned an average of 9.65% since June 2007. Learn more about peer-to-peer lending.

Lending Club’s No-Fee, Self Directed IRA

You can now invest your lending club notes within one of Lending Club’s self-directed IRAs, administered by EntrustCAMA. A self-directed IRA allows you to invest in things like real estate, precious metals, land, businesses, and debt (e.g. lending club notes). The benefits of self-directed accounts are that they let you diversify by investing in these non-traditional investments. Lending Club offers multiple varieties of self-directed IRAs. You can do a Rollover IRA, or open up a Traditional IRA, Roth IRA, SEP IRA, or Simple IRA.

When Lending Club first rolled out this product the had an annual maintenance fee that you couldn’t avoid. Now they’ve removed those mandatory fees and give you the chance to have a no-fee IRA. To maintain a no-fee status, you need to open the account with $5,000 and keep that balance for a year. Then in your second year, you need to work towards a balance of $10,000 by the end of year two. The annual fee is $100 otherwise.

Consumer Debt in a Retirement Account?

There are those who would argue that you shouldn’t invest in consumer debt for your retirement. They say it’s too risky, and that’ peer lending is unproven. In addition, the IRA was designed for your retirement. I’m a huge fan of IRAs, but only for use with retirement funds. If your peer lending is intended to be non-retirement investing, then you probably shouldn’t place them in an IRA. At the same time, it’s hard to argue with Lending Club annual returns. At a time when stock investing is flat at best, peer lending notes look pretty attractive, if only for a small percentage of your portfolio.

I’m certainly not advocating placing all of your retirement assets into peer lending notes. I look at these Lending Club IRAs like I do the Discover IRA CD I talked about last week. They’re just another option for you to consider for a small piece of your retirement. And their benefits may be what you need. In the case of the CD, it was FDIC Insurance you might be looking for. In this case, it might be a better return. If you already invest with lending club notes, and you consider those funds as a potential help for your retirement, well then it makes sense to put them behind the tax-advantaged wall of an IRA.

You Can Have Multiple IRAs

One fact that many investors are not aware of is that you can have multiple IRAs. So, you can keep your Roth IRA at Vanguard (or wherever you have it) and open up a second IRA with Lending Club. Just remember that your annual contributions are limited to $5,000 annually across all IRAs.

Lending Club IRA: Add 9.5% Returns to Your Retirement Account is a post from: PT Money: Personal Finance by PT.

2c3ca6358dbd4ad8b0c3714b040d53d9

E*Trade $500 New Account Bonus + 60 Days of Free Trades

Michael — Wed, 25 Aug 2010 12:00:48 +0000

If you’ve been looking for a new place to make online trades, look no further than E*Trade. From now until December 31st 2010, new account holders can earn up to a $500 cash bonus, as well as free trades for the first 60 days the account is opened. In terms of the cash bonus, the maximum amount you can receive is $500 and depending on your deposit size, your cash bonus will be in the following amounts:

Deposit Amount	Cash Bonus
$250,000+	$500
$100,000 - $249,999	$250
$50,000 - $99,999	$100
$25,000 - $49,999	$50

In order to qualify for the bonus, you must make the deposits within 45 days of opening your new E*Trade account AND the funds must remain in your account for a minimum of six months, otherwise you could forfeit the bonus. (Terms of forfeiture are a little unclear)

The second part of the bonus deals with 60 days of free trading. To be clear, you will NOT be making free trades real time, rather you will be reimbursed for all of the trades you make during the first 60 days of opening your E*Trade account, up to 500. Additional details:

Cash bonuses will be credited within 8 weeks
No credit will be given for unused trades
Only valid on E*Trade trading accounts (not E*Trade IRA’s or banking accounts)
Account must be funded with a minimum deposit of $2,000

E*Trade certainly isn’t the cheapest broker around with trades of $9.99 and $7.99 (after you make 150 trades) however their technology and customer service has always been regarded as the best around. With a bonus offer attracting new customers who either trade frequently or in large amounts, you can see why serious online trades vote E*Trade the best year in and year out. To sign-up for this limited time offer, visit E*Trade through any link contained in this post.

E*Trade $500 New Account Bonus + 60 Days of Free Trades is a post from: PT Money: Personal Finance by PT.

2c3ca6358dbd4ad8b0c3714b040d53d9

Retiring Abroad to Paradise: Possible, But it’s Not Without Risks

Guest — Tue, 17 Aug 2010 17:18:13 +0000

Okay, so with the Baby Boomer generation facing retirement, you are going to start seeing a great deal of advertisements and articles proclaiming the perfect retirement solution: Retire to the developing world! In the scenario being touted, you will live like a king in your beachfront property, eat out at a restaurant four days a week, and have your live in cook make up the rest of the meals. Plus you’ll have super cheap health care, a maid, and experience near perfect weather all year long. All this for less than US$1500 dollars per month.

The truth is quite different. Retiring abroad is filled with possibilities, and filled with risks. It is certainly possible to move abroad and save money in retirement. It is certainly possible to have an upper middle class lifestyle abroad living only on social security. However, you have to make some significant choices, and be prepared for any number of eventualities. Below is a list of some basic discussion points about retiring abroad to get you thinking about the move. It’s not something to do on the spur of the moment; it takes considerable thought and preparation.

1.Choose a country with a cost of living you can handle. If you are retiring on just social security, you most likely will not be able to move anywhere you want. Europe is out of the question, and the developing world is your only real choice. But don’t let that get you down. Western Europe, Australia and New Zealand might be out of the question, but there are still dozens of other possibilities.

2.Living abroad is not necessarily cheaper. There are many places in rural America that are very, very cheap. Combine that with the fact that you get inexpensive subsidized health care in the form of Medicare, and you can see how retirement abroad can get expensive. Remember, if you live abroad, you usually must purchase your own private plan. While health care abroad tends to be very cheap, it is an added expense to any budget.

3.The cheaper the country, the poorer the country. And the poorer the country, the more dangerous the country. You know the old saying: “You get what you pay for”? It applies to countries as well. If you are looking for bargain basement living, expect to have to deal with more poverty, more government incompetence, more crime, and more instability. I’m not saying you can’t have a great time in an extremely impoverished country like Belize or Nicaragua, I’m just saying you won’t have the comforts you’re used to necessarily.

4.You must adapt to the country, the country will not adapt to you. If you cannot live without a two car garage, cable television, air conditioner on 24/7 and weekly buffets at the local rib house, retiring abroad may not be for you. Moving abroad means fitting in and not standing out. You’ll need to eat what the locals eat, often dress like they do, and certainly live in similar accommodations to what they live in. To do otherwise will mean spending a lot of money. When I was an expat in Dubai, the most expensive supermarket in town was the American supermarket that had all the hard-to-get-air shipped American products like Rice Krispies. Of course they all sold for 100% markup, and the store made a killing on homesick Yank expats.

5.Remember, you are an immigrant. As a retiree living abroad, you are an immigrant in the eyes of the government of your new country. That means you may have less rights than your fellow citizens. You can be deported, you can have laws and regulations regarding you arbitrarily changed, and you may have to deal with massive government bureaucracies in regards to your status at times. It’s all part of the adventure and the challenge.

I haven’t even touched on crime, health care, political instability, currency devaluations and other subjects that I think a well prepared expat retiree should at least have some knowledge of in regards to their new country. If you are thinking about retiring abroad, do it because you want to, not because you have to. I don’t consider it the solution to the massive looming problem of impoverished retirees in the United States, I consider it an alternative and possibly flawed solution. It can be done, however, but it is not without difficulties. Of course some might say, what isn’t?

Rick Todd writes at Expat Investing (www.expatinvesting.org), a blog about living, working and retiring overseas from a financial perspective.

photo by www.D2k6.es

Retiring Abroad to Paradise: Possible, But it’s Not Without Risks is a post from: PT Money: Personal Finance by PT.

2c3ca6358dbd4ad8b0c3714b040d53d9

Discover Bank’s IRA CD

PT — Tue, 17 Aug 2010 04:11:34 +0000

Discover Bank is offering a 12-month IRA CD for 1.50% APY and a 10-year IRA CD for 3.50%.

A great retirement investing alternative that not many people have heard about is the IRA CD. That would be a CD inside of a Roth or Traditional IRA. With this approach, you get the security of a CD with the tax-advantages of an IRA. As a reminder, an IRA is a tax-advantaged retirement account which you use to hold investments, like a stock, bond, or in this case, a CD. A CD is, of course, a certificate of deposit, which is a deposit product with a fixed term and rate. They are also FDIC insured.

Discover Bank is currently the only bank that I know of offering an IRA CD. Their IRA CDs range anywhere from 3 months to 10 years. Click below see current rates:

So, who should consider an IRA CD? Ultimately, you need to be making your investment decisions. There is no one-size fits all investment plan. But generally speaking, here’s who should consider an IRA CD:

CD investors that want to pay less in taxes.
Retirement investors who want an alternative to their MMF to meet their cash asset-class requirements.
Beginning investors who want to start an IRA but don’t know about other investment asset classes.

I have faith in the American business for the long-term. For this reason, and being the young guy that I am, I stay with domestic stocks for a large percentage of my portfolio.

But with the economy still on shaky ground, and some discussing another possible market crash, some investors may be looking for a safe, secure place to continue investing for retirement. This approach makes sense for a lot of people. If you’re looking to preserve capital (i.e. keep your retirement money safe), the typical places to turn include a money market fund within your retirement account, or a simple CD or savings account.

MMFs don’t have FDIC Insurance or a return on your money, and CDs outside of an IRA aren’t able to achieve extra tax savings. The IRA CD brings them both together. Learn more about IRA CDs by visiting www.DiscoverBank.com.

Discover Bank’s IRA CD is a post from: PT Money: Personal Finance by PT.

2c3ca6358dbd4ad8b0c3714b040d53d9

TradeKing $50 Cash Bonus for New Accounts

PT — Thu, 05 Aug 2010 13:45:25 +0000

TradeKing, one of our favorite online discount brokers has launched a summer promotion where new customers earn a $50 cash bonus! In order to receive the bonus, there are a few stipulations that must be met.

The account must be opened before August 31st, 2010
$2,500 or more needs to be deposited
A minimum of $2,500 (minus losses) must be left in the account for at least six months
One trade needs to be executed within the first 90 days.

If any of these rules are not followed, TradeKing reserves the right to remove the $50 bonus from your account. It’s a little unclear as to how or when that could happen but don’t tempt them!

If you’re looking to make your very first trade, or are looking for a new online discount broker, TradeKing might be your best option. Their current commission structure is very competitive ($4.95 per trade, $0.65 per option) and TradeKing continues to win awards from Kiplinger and Smart Money for their excellent customer service. Plus, the education you can receive from the TradeKing community can help in making the tough decisions.

With top notch encryption security and cutting edge technology, TradeKing is a favorite amongst most online traders. To take advantage of this limited time $50 bonus offer (expires 8/31), visit TradeKing through any link contained within this post.

TradeKing $50 Cash Bonus for New Accounts is a post from: PT Money: Personal Finance by PT.

2c3ca6358dbd4ad8b0c3714b040d53d9

Mutual Fund Basics

PT — Sat, 31 Jul 2010 04:59:00 +0000

If you have a company 401K, then you probably invest into a mutual fund versus investing in individual stocks. But do you really know what it is? Let’s cover some mutual fund basics. A mutual fund is an investment company that pools the money from several different people (investors like you) and then buys into stocks, bonds, money market accounts, or other assets, like commodities. Shares of this company are then offered for sale. Mutual funds therefore have to be managed by a fund manager, who collects all this money and makes sure to buy and sell all the right stocks, bonds, etc.

One thing I learned recently when studying mutual fund basics is that these funds can make money for you in three different ways: dividend payments (from the stocks owned within), capital gains (when stocks are sold within the fund), and increased net asset value (NAV). When I typically think about mutual funds, I just think in terms of increased NAV. I forget that some stocks pay dividends, and that managers are constantly selling winning stocks to lock in gains. I guess because these gains and dividends remain in the fund, you don’t really think about it.

Mutual Fund Basics

Why Invest in Mutual Funds

There are several reasons to like mutual funds. Mutual funds allow the beginning investor to own a diverse set of stocks, bonds, etc. without having to use large amounts of money to buy into each asset class or stock. Instant asset allocation. For instance, with the American Funds Mutual Fund (AMRMX), you can pay $250 and get several shares. In each share of this fund, you’ll be buying into U.S. stocks, fixed income, cash, and international stocks. And within your stock purchase, you’ll own pieces of Merck, AT&T, Microsoft, IBM, and many, many others.

To get this kind of diversity with your own money, you’d need a heck of a lot more than $250 (the fund minimum). And you’d need a lot of time on your hands. Mutual funds don’t just sit around on the same mix of investments. They are constantly moving in and out of different stocks and bonds to try to maintain a good performance and to hold true to the fund’s original goals. So with a mutual fund, you get a full time professional manager to handle all of this. The trade off with mutual funds is, of course, that you have to pay this professional to manage all this for you. James Dunton has been managing the AMRMX fund for 39 years. I’m sure he’s paid well for his services.

Risk Involved with Mutual Funds

The risks involved with mutual funds are the same with any other security investment. The investment can lose value. There is also the risk of too many expenses. Mutual funds are often heavily managed. Therefore they come with a cost. When these costs are too high, and your investment return is too low, you could be losing money.

Different Types of Mutual Funds

The three main types of funds are money market funds, bond funds, and stock funds. Money market mutual funds generally try to preserve value. This is considered the safe haven in most portfolios. Although, as we’ve discussed before, they are not FDIC insured like a money market account. Bond funds are more risky fund, and they aim for a low return. Stock funds are the most popular and diverse mutual fund category. They come in all shapes and sizes. Four common examples of stock funds are: growth funds, income funds (dividend stocks), index funds, and sector funds. Another hybrid type of mutual fund is the target-date fund, which invests in cash, bonds, and stock, getting more conservative as I age. I currently use the Vanguard 2040 fund. What type of stock funds do you own in your 401K?

Mutual Fund Expenses

The fees break down into two basic categories: shareholder fees and annual fund operation expenses. The former are usually charged when you buy or sell. The latter are charged on an annual basis just for holding the funds. When funds are described as no-load, they are referring to the shareholder fees. When you compare “expense ratio” know that they are referring to total annual fund operation expenses. Fund companies don’t make it easy to locate the expenses and fees associated with funds, so be prepared to research this before buying into a fund.

How to Invest in Mutual Funds

Mutual funds can be purchased at a mutual fund company directly like at Vanguard or Fidelity. They can also be purchased at a stock broker, a bank, or even with a CFP.

Mutual Fund Basics is a post from: PT Money: Personal Finance by PT.

2c3ca6358dbd4ad8b0c3714b040d53d9

Should You Overestimate Your Retirement Needs?

PT — Wed, 28 Jul 2010 17:00:50 +0000

How much money will you need in retirement? That’s the ultimate retirement question, right? Who knows. There are so many moving parts when it comes to retirement expectations: life expectancy, out-of-pocket medical expenses, inflation rates, investment return, taxes, etc. How could anyone possibly predict any of these things correctly?

It certainly makes you want to just throw your hands up and say “forget about it”. But we all know that’s a bad move. Not just because it will make you sound like Donnie Brasco. But because one thing is for certain: you will retire. Or you will at least get to a point where you can no longer work and provide for yourself. And at this point you’ll need to bridge the gap financially until you die.

What Will Retirement Be Like?

The question then becomes, what do you want your standard of living to be like during that period? Last week we discussed social security and how it is supposed to replace about 30%-40% of your income in retirement. Could you live off of 30% of your current income? I suspect that most of us could, but don’t want to. That leaves only one solution: making an attempt at your own retirement savings.

So when you’re playing around with your favorite retirement calculator, thinking about what you’ll need in retirement, I’d encourage you to use long life expectancies, high inflation rates, etc. Be overly-conservative in your approach. There’s no harm in expecting you’ll need more. Overestimating and then underachieving is better that underestimating and achieving.

Photo by pedrosimoes7.

Should You Overestimate Your Retirement Needs? is a post from: PT Money: Personal Finance by PT.

2c3ca6358dbd4ad8b0c3714b040d53d9

What is Inflation and Can You Avoid It?

PT — Mon, 26 Jul 2010 19:24:09 +0000

Inflation 101

Inflation is the general rise in the price of goods and services over time. Basically, when the price of the sandwich you buy for lunch rises, the dollar that you use to buy it is worth less. So, over time, the nature of inflation is to reduce the value of the exchange currency. This explains why you could by a can of coke for $.25 when I was a kid. But now they cost $.75. Inflation is measured by watching the change in an index, like the Consumer Price Index (CPI).

Effects of Inflation

Historically, the inflation rate has been around 3%. We had a high period of inflation in the 1970s here in the US, with annual inflation rates for some years more than 10%. High inflation is obviously not preferred because salaries can’t keep up, at least in the short-term. And, people who have money saved get hurt because their savings can now buy less. On the flip side, inflation can be good if you’re holding debt.

Most economists would prefer a low level of inflation vs no inflation though. From what I understand they like this slow increase in prices to keep recession at bay, and to have enough speed going to be able to press the brakes if needed without sending things in reverse.

Is High Inflation Coming?

We are currently experiencing very low levels of price inflation. The CPI hasn’t been increasing by much at all. In fact, some economists are starting to predict deflation. This seems confusing to me though since we’ve done a lot of money printing in the last 2 years. Thus, high inflation, or even hyperinflation is a concern for many in the long-term. Confusing.

TIPS: Hedge Against Inflation

There are several ways to attempt to protect yourself against high-inflation. Dave Ramsey recommends real estate bought for cash. Some recommend commodities like Gold. And there is another way that’s I’ve never discussed here.

One of these ways is to invest in Treasury Inflation-Protected Securities (TIPS). TIPS are bonds backed by the government, which have a fixed return, and are adjusted for inflation using the Consumer Price Index. If you are concerned about future inflation it might be wise to consider them for your retirement portfolio.

Carnivals: Stocks, Boomer and Seniors, Frugality, Debt Reduction, Money Stories, Personal Finance

What is Inflation and Can You Avoid It? is a post from: PT Money: Personal Finance by PT.

2c3ca6358dbd4ad8b0c3714b040d53d9

We Never See the Money, So We Don’t Miss It

PT — Fri, 23 Jul 2010 17:27:13 +0000

That’s exactly what William and Cynthia Foust of Mount, North Carolina had to say about their automated savings. According to a recent Money magazine profile, they’ve been able to save over $800,000 for their retirement. Granted they saved at a rate of 35% of their income, which is no small feat.

But a bigger feat these days seems to be remaining consistent with your savings. Life just gets in the way. One month you have excess funds and the end of the month and you can dump some money into savings. The next month, you fall short and have to reach into savings to help you out.

That’s why I love automated savings. As long as you stay at the same job, there’s nothing to get you off track. You set it up once, and you forget about it. Notice that the Fousts didn’t just do it with 401Ks though. They also used the Roth IRA, an online broker, and an online savings account to supplement their effort. Great move. They are my saving heroes.

Keep in mind if you decide to do this, you need a little more discipline to make the automation work. Instead of a direct deposit (like your 401K), you’ll likely need to set up an automated withdrawal from your checking account. Start small and set the transfers to occur the day or two after your paycheck arrives. Once you get comfortable with the move you can increase your contributions.

To see more inspiring money profiles, visit my list of Millionaires in the Making.

We Never See the Money, So We Don’t Miss It is a post from: PT Money: Personal Finance by PT.

2c3ca6358dbd4ad8b0c3714b040d53d9