Free Investments
January 3rd, 2006
Question: What are some good tax free/deferred investments?
I need ideas on some (possibly long term) investments to use in order to receive interest and also tax free or tex deferred. Please give links to sites. Any info is helpful, thanks.
Answer: Best Options for tax deferral are your company 401k or an IRA. There are many many investment Options if you are interested in an IRA – both through mutual fund companies and by investing directly in stock market. If you are not an experienced investor, then go the mutual fund route. Here are links to my 2 favorite fund companies:
http://www.vanguard.com
http://www.troweprice.com
However, if you go this route, it can’t be ‘possibly long term’ – IRAs and 401ks are for saving for retirement, and if you want to withdraw some or all of your funds prior to that, you will be penalized.
(FYI, you receive interest from savings accounts, CDs, or bonds – profits from investing in stocks or stock mutual funds would come in the form of capital gains and/or dividends.)
If you’re not sure you can leave the money sit until retirement, then you could try municipal bonds. But you should understand their features and in which jurisdiction(s) they’re tax free.
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