Money Matters Radio Show #821
October 15, 2006
Women and Money class from Saturday a hit with attendees, so Mike will followup with more classes starting January 2007. Next public appearance by Mike is his annual Breakfast with Santa Claus at Stone Mountain Park. Tickets now on sale - click here to buy!
Mike told two callers to roll out of old 401k plans into personal IRAs so they can control their money and buy investments from outside the limited menu of their old company plans. Mike advises rolling into two IRAs, part into bank CD's for safety and good yields and a second part into market risk investments for higher income, growth and inflation protection. Mike again urged people who are retiring to look at income oriented investments and dividend stocks. New web site to check out is www.incomeplanner.com.
How to make choices amond the blizzard of index funds these days. Mike says the standard S&P 500 index fund historically is a great choice inside a 401k and an even better choice is his personal fund favorite, Vanguard Total U.S. Stock Market. However, outside the 401k, you have a number of great choices to further diversify your portfolio. Mike says people need especially to begin looking at dividend index funds and dividend index exchange traded funds. New announcement from Vanguard that it will soon offer a second dividend index fund to its roster. The fund is currently in registration, but there are several exchange traded funds now available that already offer an approach to indexing dividend stocks with the fastest increasing dividends. See www.etfchoices.com for more information.
Energy Royalty Trusts. A caller wanted to know if these are good and Mike says they can be, but to look carefully at location and duration in these highly risky but high yield energy stocks.
Another caller phones in about his company becoming the latest to add the Roth 401k in addition to the regular 401k. Which should he do? Mike says both are good, but for highly compensated people who can't get a regular 401k - the Roth 401k does not have income limits and becomes very attractive. For others, splitting the money - perhaps 50-50 into each plan might be good, but the bottom line it becomes a very personal decision about what is best for each person. Both plans are good, but the addition of the Roth 401k has become a very attractive thing to look at.
