Philanthropy 
4
comments

Fidelity Charitable Gift Fund

Earlier this year I discussed how I was going to follow Flexo’s lead and open up a Fidelity Charitable Gift Fund. The idea behind the Fidelity Charitable Gift Fund is that you can make a charitable donation now, have the assets appreciate, and then decide where donations will go later on. Much like how a mutual fund is actually an organization, the Fidelity Charitable Gift Fund is an organization. When you donate money, you are donating to the Fidelity Charitable Gift Fund and you have two options as to where the money goes. You can either open up a Giving Account under your name (or any name you wish) or open up a Pooled Income Fund.

Giving Account

This is the type of account Flexo talked about and one that I was seriously considering. What you do is open a Giving Account, contribute funds, direct how the funds are to be invested, and then recommend grants. You will notice that all the documents say that you will “recommend” which organizations will be the beneficiary of your funds, but they aren’t legally bound to honor your wishes. I think that specific language is used for legal purposes but they honor most recommendations.

Pooled Income Fund

This is the second option and one I hadn’t considered. It’s part charitable fund and half income generation, akin to an annuity, though the final payout goes to a charitable organization (up to 10). So let’s say you contribute $10,000. You direct where the contributions will be invested and you can select up to two beneficiaries. Each quarter, the proceeds from your investments will be paid out to the beneficiaries. Upon the death of the final beneficiary, the value of the account goes towards charities. It’s different than the Giving Account and less desirable for what I’d like to accomplish.

Considerations

So, it sounds pretty easy right? Why wouldn’t everyone do this? (these concerns cover only the Giving Account)

  • Initial limits and fees: The initial contribution has to be greater than $5,000 and each additional contribute has to be greater than $1,000. The fees include the expenses of the investments plus an Annual Administrative Fee. The administrative fee is the greater of 0.60% of the total fund value or $100 for the first half million, 0.3% for the second half million, 0.2% for the next million and a half, and 0.15% for the rest up to five million. Beyond that and the fees are different. If you were to contribute $5,000, you’d be talking an administrative fee of 2% plus the underlying investment fees. If you don’t have $5,000 or you don’t want to pay any of these fees, you might want to just donate directly to a charity.
  • Time horizon: Since you do select investments for your contributions, there is the potential that your investments will lose value. So, if you plan on doing this, contribute funds you think you might want to use next year or the year after (or, ideally, in five years). Increasing the time horizon will smooth out the random walk of the stock market.
  • Tax benefit: As much fun as it would be to have the Jim Charitable Trust, the tax benefits are better if you contribute appreciated stock. When you donate appreciated stock that you’ve held for over a year, you can deduct the entire value of the stock from your income, including the appreciation. (For more on that, read this article about reducing your capital gains by donating stock) With the Giving Account, you deduct your initial contribution and not the amount actually granted, so you never actually benefit from the appreciation (but you can donate appreciated stock).
  • Grant exclusions: Almost any recommendation you give will be accepted with the exception of several groups, though there are very good reasons. For example, you cannot recommend any donation that would result in you receiving any sort of gift or preferential treatment. The list is available here.

I’ll be honest, the idea of opening a small charitable gift fund in our name does sound like fun and it would be great to be able to leverage the market to help further our philanthropic goals but with a $5,000 start price and those annual fees, I may wait a little while before opening one up. The uncertainty of the market (and a short time horizon) are also serious considerations as well… what do you all think? Good idea? Bad idea? Wait? Go now? :)


 Personal Finance 
0
comments

Stock Market Brokerage Phone Numbers and Contact Links

Need to absolutely reach your brokerage right now? Here’s a handy resources of all the brokerages I am aware of, their phone numbers, hours of operation, and a link to the brokerage’s contact page. On that page you’ll usually find a Fax number, overnight mail address, regular mail address, email addresses, and sometimes even an online chat. In many cases, there are multiple telephone numbers listed, I chose the one for existing brokerage clients (if that’s not what you need, just hit up the link and you’ll find the whole list).

Brokerage Phone Number Hours of Operation Contact
Charles Schwab 800-435-4000 24/7 link
E*Trade 800-ETRADE-1 7AM-Midnight ET link
Fidelity 800-544-6666 Unknown link
Firstrade 800-869-8800 8:30AM-9PM ET M-F link
Merrill Lynch 800-MERRILL 24/7 link
optionsXpress 888-280-8020 9AM-5:30 ET M-F link
Scottrade 800-619-SAVE Unknown link
Sharebuilder 800-747-2537 8AM-9PM ET M-F link
TDAmeritrade 800-669-3900 7AM-8PM ET M-F link
T. Rowe Price 800-225-7720 8AM-8PM ET M-F link
TradeKing 877-495-5464 8AM–6PM ET M-F link
UBS None Online only link
Vanguard 877-662-7447 24/7 link
Wachovia Securities 877-879-2495 8AM-8PM ET M-F link
WellsTrade 800-TRADERS 24/7 link
Zecco.com 909-657-6655 9AM-6PM (EST) M-F link


Did I miss your brokerage? Let me know and I’ll add their phone number.


 Investing 
19
comments

Starting A Roth IRA With $500

Nashawn recently asked on my post about opening a Roth IRA right this minute for some advice as to how she should invest $500 with a Roth IRA. She’s looked at Vanguard’s mutual fund accounts and ran into the minimum balance requirement for each of the funds. At Vanguard, the STAR Fund has the lowest minimum balance with $1,000 – a good $500 more than what Nashawn has at the moment. If I were her, this is what I’d do…

Wait Until April 15th Next Year

You have until tax day next year to contribute to your Roth IRA this year. That is, you have until April 15th, 2008 to contribute to your Roth IRA for 2007, giving our heroine a good nine months to try to get her balance up to $1,000. This is predicated on the fact that you are sold on Vanguard’s mutual fund accounts.

Consider Another Brokerage

You don’t have to go with Vanguard and you don’t even have to go with their mutual fund account, with a regular brokerage account your account balance minimums are lower than $3,000. TradeKing, Sharebuilder and Zecco are atypical brokerages that don’t have account minimums and both are known for their cheap/free trades. That’s crucial for a balance of $500. TradeKing has no custodial fee but Zecco charges $30/yr and Sharebuilder charges $25.

When it comes to the bigger brokerages, your pickings get slimmer. Fidelity will waive their minimum of $2,500 if you can commit to a $200/month contribution (Fidelity has no annual fee). If you can commit to that, you might as well wait a few months and go with Vanguard (if you wanted).

Summary: If you’re sold on Vanguard and can wait, wait; otherwise there are plenty of other options out there whether you want a discount brokerage like TradeKing or a more traditional name like Fidelity, just keep an eye out.

If you know of any brokerages with low account minimums and low annual fees for Roth IRAs, please share!


 Investing, Retirement 
119
comments

Go Open A Roth IRA Right Now!!!

Do you have a Roth IRA? If so, excellent job, you’ve already done one of the best things you could probably do to ensure you have a financially viable retirement. If not, why not? If your excuse isn’t, I make more than $110,000 and thus am not allowed to contribute, then your excuse is not good enough.

Don’t have enough time? It takes literally fifteen minutes. Do it while you’re watching American Idol or CSI: Saturn. Fifteen minutes. You spend more time getting dressed in the morning. Go to Vanguard, or Fidelity, or TD Ameritrade, or Etrade or your favorite brokerage firm. (I even linked to the Open Account page to save you a few seconds)

Don’t have enough money? Did you know that if you contributed $4,000 (max for 2006 and 2007) right now and it appreciated at a mere 7% for the next twenty years, you would have $15,478.74? While that doesn’t sound like a lot of money, 7% is a relatively conservative number for your investments. If you were to instead use 11%, you’d have $32,249.25. If you were to stretch the time out thirty years at 11%, you’re talking $91,569.19 – all from a single $4,000 contribution right now.

Now, ignoring all those crazy appreciation numbers, remember that you don’t have to contribute all $4,000. You can contribute $1,000 or $100, but you need to contribute something. (I’d argue that you want to contribute as much as you can to avoid low balance fees but $1,000 is better than $0)

Afraid you’ll need the money? Since your Roth contributions are after-tax contributions, you can withdraw those contributions whenever you want. Dire emergency and you have no choice but to raid the Roth? You can still do it. You can still change your mind.

Opening a Roth IRA is ridiculously easy and it’s not something to be afraid of. Don’t be afraid you don’t have enough money and instead challenge yourself to find a way to save a hundred bucks a month and at the end of the year you’ll have $1,200 saved away (worth $27,470.76 in thirty years at 11%) that you didn’t think you had. You have until April 16th to file your taxes this year so you have until April 16th to open up a Roth IRA and contribute to it for 2006. Go! Do it!


 Investing 
6
comments

Broker Commission Fee Schedule Comparison

Thinking about investing in some securities? Well you’re going to need a brokerage account. While it’s hard to compare the qualitative differences between each brokerage, it’s easy to compare one of the big quantitative differences – fee schedules. So, below I’ll compare the fee schedules of each of the major brokerages in easy to understand language and hopefully it’ll make your decision just that much easier. In the discussion below, I only talk about online trades – no phone or in person (broker-assisted) transactions.

(Click to continue reading…)


 Free 
0
comments

Free Investing Essentials from Fidelity

I received this offer in an email from MarketWatch. Sign up and get a copy of Lighbulb Press’ Investing Essentials booklet which “contains the most widely-read pages from The Wall Street Journal financial guides.”

I would bet you that someone from Fidelity will contact you so I’d just leave the telephone number (optional anyway) blank and enter a spam email address if you don’t want to be hassled.

Fine Print: Lighbulb Press is an independent company and is not affiliated with Fidelity Investments. No contribution, transfer of assets or account opening is necessary to be eligible for this guide.


 Retirement 
2
comments

Picking a Firm for your Roth IRA

Many friends of mine are opening up Roth IRAs for the first time and have asked where the best place to put that account. My first thought was to go with a brokerage firm that has favorable fee schedules for the investments they’re looking to use. A firm that has higher stock transaction fees but lower mutual fund fees works for someone who only wants to leverage the benefits of “automatic” diversification and will never buy a single share of Microsoft. Conversely, if you’re looking to bank on the sustained growth of a handful of companies or want to jump onto ETFs, a firm with low stock transaction fees is where you’d like to go.


(Click to continue reading…)


 Investing 
5
comments

Vanguard Target Retirement Funds Explained

There has been some interest in an explanation of how the Vanguard Target Retirement Funds work since I mentioned them in an explanation about Mutual Funds in a past article (read The Beauty of Mutual Funds). In this article, I’ll give you a little explanation of how these funds work and what you might expect from them (past performance is not an indicator of future performance!).

They’re in the asset class titled “Lifecycle” by Vanguard and several other brokerage houses have very similarly structured, lifecycle mutual funds (Fidelity has the Fidelity Freedom Funds if that rings a bell). The concept is as the target date draws closer, the fund will invest in increasingly stable investments that have higher yields. Vanguard recommends the lifecycle funds for those seeking “an all-in-one retirement portfolio that automatically grows more conservative as their expected retirement date nears…”

(Click to continue reading…)


Advertising Disclosure: Bargaineering may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on links posted on this website.
About | Contact Me | Privacy Policy/Your California Privacy Rights | Terms of Use | Press
Copyright © 2014 by www.Bargaineering.com. All rights reserved.