It Is Never Too Early To Start A Roth IRA!

The Roth is kind of weird until you get used to it in terms of how much you can put in (contribute) each year depending on how much you earn (compensation). Because of this you really have two limits, one dealing with your compensation and the other dealing with your contribution. Let me explain.

The first contribution limit has to do with compensation, in other words you have to be making some money somewhere. As mentioned, you must have some form of compensation to qualify to make a contribution, but there is also an income limit that says whether or not you can put money in; make a contribution. If your adjusted gross income exceeds these limits, you are no longer eligible to contribute to a Roth IRA.

In 2004, the adjusted gross income limits were:

? If your tax filing status is "Married Filing Jointly" - $160,000

? If your tax filing status is "Married Filing Separately" (and you live with your spouse) - $100,000

? If your tax filing status is "Single", "Head of Household" or "Married Filing Separately" (and you did not live with your spouse during the year) - $110,000

Now, here is a little known totally legal secret that is worth your time reading this article. When I taught investment at the University of South Carolina I gave 10% credit of the course grade for the simple act of opening a Roth IRA. I was amazed when a few students would not open one because their parents had told them it was illegal to if they did not have a job. I told them that they were going nowhere fast if they could not think creatively enough to just go mow a lawn somewhere for ten bucks and put it into the account. I made it clear to them that wealthy people become so by taking action nut just thinking about taking action!

The best application of this concept I ever learned was a real estate investor that wanted to open a Roth for his newborn son. The problem of proving that a newborn makes money in a job is a tough one even for my noodle but this fellow came up with a great idea. He took a photo of the baby and put it on the business card with the words; "Help my dad finance my education by buying a home from him?he is the best dad in the whole world!" Then he paid the baby, get this?modeling fees! He put those fees straight into the account and filed a return for the baby with the IRS. I love that story! Talk about creative that is the kind of person that will go far in business. This is also the only newborn I have heard of with a tax free stock portfolio from earnings off his own job!

The second Roth IRA contribution limit has to do with how much you can contribute to your account. Below is a table that outlines the contribution limits established for the next several years:

? 2004 - $3,000 ($3,500 if you are age 50 and above)

? 2005 - $4,000 ($4,500 if you are age 50 and above)

? 2006 - $4,000 ($5,000 if you are age 50 and above)

? 2007 - $4,000 ($5,000 if you are age 50 and above)

? 2008 - $5,000 ($6,000 if you are age 50 and above)

If you need more information about Roth IRAs, you should consult a tax professional such as a Certified Public. Accountant or Certified Financial Planner. You can also get more information directly if you take a look at IRS publication 590 - Individual Retirement Arrangements. Using a Roth is the very best trading account to use while investing in the stock market.

ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., a.k.a. "The Wallet Doctor", is a successful futures trader, real estate investor, and stock investor. Dr. Brown holds a Ph.D. in finance from the University of South Carolina. His 1998 articles in Technical Analysis of Stocks and Commodities were prophetic in predicting an impending stock market crash. He has helped many people become profitable investors by teaching them to look out over many years to spot stocks that are low and primed for rise in the new bull market. His second article met with approval by Dr. Bob Shiller of Yale University. Dr. Shiller is the economist that Alan Greenspan most highly regards who coined the term "Irrational Exuberance." In 1998 he shouted to the world to "get out" of the stock market but now he is shouting to everyone that it is time to "get in!" The Wallet Doctor is not only sought after for investment advice and coaching in stock investing but also in futures trading and real estate investing.

Visit Dr. Brown's site at http://www.BonanzaBase.com or sign up for his investment tips at http://www.WalletDoctor.com

---

How Eating Bitumen Made Me a Better Stock Trader

Stock market trading is a fascinating activity.There are so many... Read More

Asset Allocation Lessons: The 70% Inflation Solution

For investors only... and for speculators who need to invest... Read More

Success Trading for New Traders: What Does Bid and Ask Mean?

Do you ever wonder exactly what's going on in the... Read More

Help with My Annuity

The cries are heard from the distance, "I need help... Read More

Creating Wealth by Gearing Up

Gearing is where you borrow money to invest. As already... Read More

Tyranosaurus Rex

Everyone knows T Rex was the most fearsome of all... Read More

Options Education : Opinion versus Fact!

The most basic aspect of trading is learning to differentiate... Read More

The Switzerland of Asia Shines

In many respects, Singapore is the Switzerland of Asia.Begun in... Read More

How To Start Investing For Financial Independence, Part 1

Today, I am going to start a multi-part series about... Read More

It?s Not the Size of Your Bank Account

You might think that if you win the lottery or... Read More

Fundamentals of Option Pricing

When one begins to consider an option, it is very... Read More

An Investment Real Estate Strategy Unknown To Most Is A Negative Amortization Loan

If you want to make the most of your personal... Read More

The Dreaded Direct Question

(Please have a glass of water within reach before reading... Read More

Bearish or Bullish?

If you are interested in stock investing and the stock... Read More

Invisible Mutual Fund Fees Erode Your Returns!

Many investors think that investing in mutual funds is free.... Read More

Why the Rich Keep Getting Richer

Rich people: fortunate, lucky, selfish, and arrogant? Or highly educated,... Read More

The Arrow-Debreu Contingent Claims Model of Investment

Throughout the discussion of speculation and stability, we emphasized that... Read More

Chinas Great Missed Opportunity

While a U.S. Representative to the Asian Development Bank Executive... Read More

Annuity Owner Mistakes

Okay, so I can tell you I have sat in... Read More

The Benefits of Laddering Your CD Investments

If you've decided to stock some money away in a... Read More

Selecting Rules for Investing and Trading

There are three important differences between investing and trading. Overlooking... Read More

Risk and Reward

If you are doing your own investing in the stock... Read More

New U.S. Mint Coins a Golden Opportunity

In April, the U.S. Mint revealed plans to strike in... Read More

Going Offshore For Asset Protection

There are a number of key reasons why individuals and... Read More

Trading For A Living - Part 2

In part 1 of this article I started to look... Read More

How to Invest Overseas - Intelligently!

In recent months, many advisors have talked a lot about... Read More

Need To Trade!

You don't HAVE to be trading.As a novice trader, you'll... Read More

Investing and the Fear of Regret and Greed

People tend to feel sorrow and grief after having made... Read More

Landlording 101, Tricks of The Trade

Looking Inside Your Tenant's Mind Basic Mind-Reading Report 101 for... Read More

Is Offshore Banking for You?

You've probably heard about people who keep their money offshore.... Read More

My Way Or The Highway: Give Your Financial Professionals A Good Talking To!

All this talk about Investing is encouraging lately. Over the... Read More

Angels, Are They Real?

They're real, but few survive. High risk investing is dangerous... Read More

Forex market offers opportunity and information

The forex market is what is called an international exchange... Read More