Cash or Charge ...

Received a letter from TD Ameritrade about new fee structure for my account. I had this account for a while, actually opened with Datek which was acquired by Ameritrade. Once in a while I did some Stock/ETF purchases in this account. They have made some improvements, like:

• Lowered the commission, now it is $9.99 for all stock and options trades.
• Removed the requirement for minimum balance to avoid maintenance fees.
• And now you have access to local branches.

On the downside:

• I was hoping they will lower the fees to same level as Scottrade, Firstrade and a couple of other discount brokerages, considering some like Tradeking are offering it even cheaper.
• They increased the transaction fee to buy mutual funds. Well they have more than 1300 no transaction fee funds, but if you want to buy funds from Vangaurd, Fidelity or Dodge and Cox through them it will cost you $49.99, which is kind of steep.

Since they have a cheaper option called Izone ( used to be freetrade.com), I decided to open an account with them and do an internal transfer of my all Ameritrade account holdings to Izone. It didn't cost anything to do an internal transfer and I think Izone should be fine for now, till I figure out a better option.

Few weeks back I posted my thoughts on why I don't think making or not making that "magical" number is that important in your journey towards the retirement. How there are a number of other aspects affecting your life after retirement, and what's on my priority list. I'm not sure how many people would agree or disagree with me on that, but here is a wonderful article saying there is "More to retirement planning than having enough cash", worth reading.

I have an Orange Savings Account with ING Direct, it is currently paying 4.00% Annual Percentage Yield on this FDIC-insured savings account. They have a refer a friend program: if my friend opens an account with minimum $250, they will deposit a $25 bonus in his/her new account and a $10 thank you bonus in my account.

I have a few referrals left to give to people to open new accounts with the $25 bonus. Below are the referral links you can use to open an account with an initial deposit of $250 or more and you'll get the bonus.

Each link can only be used once, so before opening the account please verify (which is pretty easy) that link is not already used. To verify when you get to the next page, check the text at the top. If it says:

"The link you've used to open a new Orange Savings Account has either expired, or has already been used. This is no longer a valid referral link."

Then it is already used, pick a different one. If you find that all the links are used, leave me a note or send me an email.

ING Direct $25 Account Opening Bonus
ING Direct $25 Account Opening Bonus
ING Direct $25 Account Opening Bonus
ING Direct $25 Account Opening Bonus
ING Direct $25 Account Opening Bonus (Used)

Once again, when you use these links to open account, and fund the account with an initial deposit of at least $250, you'll get a $25 bonus, and I'll get $10 from ING Direct for referring you.

Other than filing my taxes last Friday I made a contribution of $4,000 to my Roth IRA account. Between paying my federal and state tax bills and couple of other expenses, things started to get little tight so I decided to use cash sitting in my taxable investment account for this contribution. After this contribution my balance in Roth IRA stands at $11,364.28, currently all of it is invested in Vanguard 500 Index Fund at Vanguard. Considering that all your earnings in Roth IRA are tax-exempt, and if a need arises it allows you to withdraw your contributions without any tax or penalty anytime, I see no reason why one shouldn't put money in Roth IRA (only exception could be 401(k) accounts where your employer makes a matching contribution). Since you are allowed to contribute only small amount every year towards your Roth IRA, and if your earnings go up in future, due to income limitations you may not be be able to contribute to it, it should be wise to open a Roth IRA as early as possible in your career. Today is the last day to make a contribution for 2005.

Click here and here to find out more about Roth IRA or compare it with other retirement options.

There are many wonderful blogs out there that are worth exploring, some of these bloggers have been posting for a long time. What is really interesting how different things in our life are associated with our personal finances, how money is linked with just about everything in our lives. These blogs talk about it, some describe about how they are coming out of debts, some discuss living frugally, and some are about same "old" idea of building wealth. I have added a few more blogs to my list and plan on keep expanding as I find other blogs I read/like. Last but not least Happy Easter to everyone.

Finally I'm done with our taxes, like last couple of years I used TurboTax ( application version) to do the "dirty" work. Since I knew that I owe money on both federal and state I decided to file it later than sooner. I printed and signed them last night and they will be mailed today.
Here is what we paid:

• 16.88 % of income to the federal.
• 5.72 % of income to state ( California).

If I include Social Security and Medicare taxes, we paid around 31.11 % ( yikes!!) of our income to the government. But when you compare it with what percentage of income people in some of the other countries pay, it doesn't look that bad. Though they get many more social services than us, such as secure pensions and health care. So take your pick... I have firm believe that government is not best spender/investor of our money.

I got my sitemeter weekly report today and suddenly number of visits were increased in last 24 hours. I was quite sure I didn't spill any gems of wisdom on this site, and after a little more digging I found out that blogger who writes Laws of Finance added a link to this blog. Thank you for adding me to your blogroll. Also welcome to all the "Laws of Finance" readers.

On a similar note, every now and then I get emails from other PF bloggers about exchanging the links. But they hardly provide any more information about what they write. Quite frankly my blogroll is about what other blogs I like to follow, so if you want me to add you to the list, please let me know what you write about, and if I start reading your blog regularly I'll definitely add a link to you. Last but not least all of you who read this blog please feel free to give any comments/suggestions on this blog.

Albert Crenshaw at the Washington Post has an excellent article on investing. If you are a "personal finance expert" you may find his advice quite basic, but if you are someone young just joining the work force it is well worth reading it. Some of the points I liked are:

• His emphasizes for young people about how time is on their side.
• He kind of outlines what should be the order of saving and investing, and how you should be doing it. He goes into quite detail about checking accounts, 401(k), Roth IRA.
• And I liked his first law of holes :)
  

A long article but work reading, I would say again a must read for anyone just entering the workforce.

Canadian Canadian Capitalist is hosting Festival of Frugality #18, which lists a number of posts from various bloggers on how to make your dollar go further. I didn't see anyone talk about rising gas prices. Gas prices are climbing almost every week and in many parts of the country ( like here in bay area) we are already paying close to $3.00 for a gallon of unleaded. If that isn't enough there are predictions that it is going to go higher during summer driving season. Considering these high gas prices there is no doubt saving gas == saving $$$. But as I see saving gas has number of other "perks" (feel free to add to this list) that go beyond your wallet, such as:

• It is good for the environment, I think the most straightforward benefit would be by burning less gas we reduce the production of greenhouse gases, which reduces global warming. But there are other indirect benefits too, like if we reduce gas consumption it'll reduce gas production which actually requires energy to produce. Also it'll reduce oil drilling which again uses energy, and not only that by less new drillings it leaves more space to live, for people and animals, which reduces deforestation.
• It is patriotic, U.S. relies on imported oil, we imported 9.713 million barrels per day in January of this year. A large part of our trade deficit is due to oil import, by saving gas we'll reduce oil import which will make us less reliant on other countries
• It may reduce geopolitical tensions.. which may save more gas ( did you see those big gas guzzling humvees patrolling streets of Baghdad).
• Did I say it saves you money.... my little ( comparatively speaking) Toyota Corolla would cost me over $1,100.00 ( ouch!!), if I drive 12,000 miles this year and fill up at current average prices in San Francisco bay area, $2.85. My plan is to reduce my gas purchase by at least 10% this year.
  

Here are some tips for saving gas that work.. and don't worry during summer you can roll the windows up and turn the A/C on, it's not that bad.