SEP IRA

Posts Tagged ‘retirement’

Question: What is better for a one employee S Corp(hair styslit) a SEP IRA or Roth Ira?

Total income is about 50,000

Answer: BOTH.. and with that income, you can have BOTH…

Remember.. the Roth is POST TAX… so your income from it becomes tax free…The SEP is PRETAX ( like a 401K..)…

Your Money: Roth IRA’s

Question: Would purchasing 2-3 shares of Berkshire Hathaway be a good idea to add to my portfilio?

My wife and I have money in various index funds through Vanguard, we have money invested in both of our SEP IRA’s through work and we also own a Duplex. I have been keeping my eye on Berkshire Hathaway stock (B shares) and was thinking of purchasing 2-3 shares and let it grow for 10+ years. I thought this may be a good idea to diversify our portfolio even more.I think each share is trading for around $4,100 dollars right now.

Do you think this is a good idea or just keep this money in my savings account which is at around 4.7% right now? I am a little hesitant on investing $8,000 to $12,000 in this stock but I have a feeling I will be happy I did this in about 10-15 years.

Any help would be apprectiated!!!! Thanks!

Answer: Since you are already diversified, it would be OK to make the investment. By the way, I faced the same problem when the Class A shares were on the market for about $4000 each. The last trade on October 12, 2007 was 127,100 for the A shares that I could have purchased for $4100 and less in the 1980s. I am more comfortable owning mutual funds that hold Berkshire Hathaway and other stocks in a well diversified portfolio.
The last 7 years have been good, but who knows if they can keep it up. Even Warren Buffet keeps asking that question.
In June 1996, Berkshire’s Chairman, Warren E. Buffett, issued a booklet entitled “An Owner’s Manual” to Berkshire’s Class A and Class B shareholders. The purpose of the manual was to explain Berkshire’s broad economic principles of operation. An updated version is reproduced in the link below.
Warren Buffet is a nice man, but who knows if he will be running the company in ten years? Warren has given much of his wealth to a foundation run by Microsoft’s Bill Gates and Gate’s wife.
Charlie Munger is a nice guy, but he could be gone in ten years too.
Warren has a team of people who he says are ready to replace them when the time comes. Will they be as successful? Who knows when you have a few billion dollars that you do not know what to do with.

Bottom line, it would be ok to place a moderate portion of your investment money in BRKB. If you decide not to do so, there are a number of good choices in Morningstar that offer better odds for long term money than a money market account. My point is that you are not limited in your choices to BRKB or a money market account which pays over 5 per cent these days.

Mitch Tuchman, MarketRiders CEO on CNBC Squawk On the Street with Erin Burnett and Mark Haines

Question: Simple ROTH IRA question?

Hello, I am 29 year old self employed programmer working from home in the US. If I were to get a Roth IRA with mutual funds, do I have to constantly monitor and buy/sell stocks within the IRA? I used to trade stocks and used to freak out when the stock tanked in one day, so I told myself I will not get involved in that.

I am thinking that a financial advisor can pick a few good mutual funds for me and all I have to do is send a certain amount of money to it per month and when I am 55 1/2 years old I can begin withdrawing. Please let me know how this works and thanks.

Answer: The expenses at mutual funds can eat away greatly at your profits. Exchange Traded Funds hold many benefits over mutual funds. Besides, with all the mutual funds out there today, how do you know who to trust? My other belief is that by adjusting just a little bit, you can greatly increase your overall return.

Here is what I do with my long term trading account. It is a very simple concept. Look at a chart of the S&P 500 – most places the ticker symbol is SPX. Make it a weekly chart – meaning each unit (bar, candle, etc.) of time is one week. Then put a 50 week exponential moving average on the chart. This setup has an uncanny ability to direct the S&P 500. Since you can’t buy SPX, you can use SPY as an alternative. When the price is above the moving average, you buy the stock. When the price gets below the line and continues moving down, you sell it. This was an easy way to be out of the market during 2000-2003 and again at the beginning of 2008.

I am not a stockbroker or licensed in anyway. Just someone fed up with the system and decided to do a little research. Your mileage may vary.

Investment Finance Tips : How to Combine Retirement Accounts