IFB39: Simple Tax Shelter: Tax Saving Instruments for Your Investments

Welcome to Investing for Beginners podcast, this is episode 39. Andrew and I are going to respond to an email that Andrew got asking us some questions. So today we’re going to talk a little bit about some of his questions, go in-depth and answer those for him.
So without any further ado, I’m going to turn it over Andrew, and he’s going to take us through some of the questions.

* How trading fees can affect your investments
* How IRAs work
* The differences between a Roth and a Traditional
* The benefits of a 401k
* Some pros and cons of Robinhood

Andrew: thanks, Dave, okay this is from Kurt.  Kirk says
“Hi Andrew, I recently less than two weeks ago came across your podcast and found it so useful and informative. Then I went back to the beginning and then in the process of binge listening to my way through the list of 30 some episodes.”
Andrew: which by the way I say that I highly recommend doing that I remember when I first started listening to podcasts I went through archives of the ones I liked and that’s a great way to you know get knowledge and get acclimated with what’s going on with these topics of these podcasts. so continuing to read on with the email
“before discovering the Investing for Beginners podcast I loaded RobinHood on my phone and began thinking about which stock or fund to purchase. I’m glad I found you when I did, I still don’t have a clue which will be my first purchase, but I now understand that my original selection would have been based on greed for something that is likely overpriced or has other indicators of a poor investment.”
Andrew: sidebar again, that’s very insightful and good job there Kurt at recognizing that and potentially you know you probably saved yourself thousands of dollars in losses and pain by stumbling onto this resource and really taking it to heart and picking it up really quickly, so that’s great back to the email Kurt says so
“I set up my account with Ally, and I’ll keep reading and doing company research. I hope to make my first of many regular monthly investments around Thanksgiving, possibly sooner if something happens to cause the market to dip. thanks again for educating beginners like me to save us from ourselves.”
Andrew: you’re welcome, very well put.
“I’m finding this to be fun and refreshing after 20-some years of dealing with mutual fund and annuity managers who offer little help and don’t have a clue on how to be an intelligent investor.
Andrew: Now to the questions. Do they, so he’s talking about Ally’s  $4.95 trading fee.
He asked: do they charge both buying and selling or one or the other?
So some of these are just going to rapid fire. Dave, I know you know the answer.
Dave: that would be yes.
Andrew: yes so you got a fee on the buy fee on the sell.
How much does the investment need to appreciate before one makes that back?
Andrew: I mean that’s going to depend on how much you’re putting in. So I believe we’ve talked about it before but on 150 dollars a month that’s anywhere from one to three percent of a loss like right off the bat.
If you’re going to invest more than that obviously making $4.95 back isn’t that big of a deal. That’s a big reason why I always talk about you know try to have at the bare minimum one hundred and fifty dollars to invest. So you’re not losing five, ten, fifteen percent straight off the bat just off of a transaction fee.
When you when you talk about a thousand dollars or more it that $4.95 is unsubstantial and you know you don’t have to make you don’t have to worry about it you don’t have to wait a long time to make that up.
and even in the grand scheme of things I mean you’re going to see stocks go up in you could see him go up a...