Robo-advised Roth IRA or Self Directed??

Question

I am 20 years old and I want to dip my toes into investing. I want to start with a Roth IRA because that fits my income and plans for right now. I have narrowed it down to using Fidelity, but I am not sure if I would be better off using the self-directed version or the robo-advised account. The robo-advised account has low fees ($0 for accounts under $10,000, which mine will be for at least a couple years) and the self-directed practically no fees at all. I feel like I would be able to do the self-directed because I have been studying up and listening to BP, but I am worried without the robo-advisor, I might get lost and I do not have another direct/human resource to go to for personal account advice. What should I do? Are there any low-cost advisors out there for beginners?

Jeffrey Evans · Answer

I just opened one with American IRA.  They are linked with TD Ameritrade so you can still do stocks but also have the option to invest in real estate or syndications or whatever if you want to.  So far there customer service ect has all been great.

R. Marcella Poole · Answer

Have you looked at Vanguard?  I appreciate their simple fee structure and inexpensive rates for investing--but I'm very conservative.  For a paradigm shift on investing, you may enjoy the read "The Simple Path to Wealth" by JL Collins.

Justin Windham · Answer

None of the common brokerage firm retirement accounts allow for investment into alternative assets. You will need to contact a self-directed Solo 401k or IRA provider. As a provider in the industry, I cannot give any specific recommendations but if you search the forums for this topic, you will find several representatives that post to BP regularly that would be happy to help.

Kassandra Shoemaker · Answer

@Justin Windham,

Which providers allow this? How do I figure out of providers do or do not allow investment into alternative assets?

Thanks in advance!

Kassandra Shoemaker · Answer

@R. Marcella Poole Thank you, I will look into both of those.

Justin Windham · Answer

@Kassandra Shoemaker

Have you been studying and listening to BP with the intention to invest into real estate? If so, you will need a self-directed IRA from a specialty provider that allows investment into alternative assets. The so called "self-directed" accounts from brokerage firms like Fidelity do not allow for investment into real estate. With the right account, you can invest into both traditional and alternative assets and maximize your investment potential.

Robo-advised Roth IRA or Self Directed??

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