In November of 2008, I quit my job to go full-time with running my business. Of course, being the financially conservative fellow that I am, there was absolutely no way that I was going to quit until I had a new health insurance policy already in place.

Like any self-respecting member of Generation Y would do, I began my research by Googling “self-employed health insurance.” After clicking around and looking at a few different sites, I came upon eHealthInsurance.

You won’t find it cheaper anywhere else.

Apparently, health insurance pricing is regulated by law so that all the different places that sell a given policy must charge the same price as each other. So, for example, a $1,250 deductible policy through Blue Cross Blue Shield will cost the same regardless of how you buy it.

Truth be told, I was completely unaware of that fact until I read it on eHealthInsurance’s site. With that knowledge in hand, I figured there would be no point in shopping around.

Comparing Policies

Of course, you’ll still want to do your research in terms of making sure that you get the policy that’s best for you and your family.

eHealthInsurance was very helpful here. They provide access to a large number of insurance providers, so you can choose between several different plans regardless of your price range.

Customer Service

I’ve only had 2 interactions so far with their customer service, but it was excellent both times.

Most recent example: In February, Kali–my wife–got her first full-time job with benefits (hurray!). Her employer provided very low-cost insurance for her, but did what appeared to be nothing in the way of subsidizing insurance for spouses.

So I called up eHealthInsurance to ask if we could keep the policy active but remove Kali from it. Not a problem at all, apparently. All we had to do was fax over a letter indicating that we wanted to remove her from the plan, and it was taken care of.

Summary: Would I recommend them?

Given our experience so far? Absolutely. They made it easy to shop for plans, provided plenty of different options for policies, and have had great customer service. (And, apparently, nobody’s going to have better prices than they do anyhow…)

Here’s the page where you can get free quotes for different policies.

I don’t write much on this blog about entrepreneurship, but since I know many of my readers are self-employed, I thought it would be worthwhile to share my thoughts (and experiences) on the topic of business formation.

If you’ve decided that you want to form an LLC or corporation for your business, it’s probably a good idea to get help. Aside from using a local attorney, the two biggest names in the industry are LegalZoom and MyCorporation.

My Experience with LegalZoom

I used LegalZoom to form my own LLC, and I was quite happy with the service. Everything went smoothly:

• 4/13/08: I place my order for an LLC filing.
• 4/16/08: I get an email to inform me that they checked the name, and it was available.
• 4/22/08: I get an email informing me that the paperwork has been filed with the IL Secretary of State.
• 4/29/08: I get an email informing me that the filing has been completed, and they’re shipping me the confirmation paperwork.
• 5/1/08: I receive my copy of all of the official paperwork.

Just under 3 weeks, start to finish. No hassle at all, and they kept me up to date the entire time. I couldn’t be more pleased.

My Experience with MyCorporation

I haven’t used MyCorporation to form an LLC, but I did use them once for a DBA filing. The experience wasn’t so great.

At first, it appeared that everything went smoothly. But, to my surprise, three months after MyCorporation told me the entire process was finished, I received a letter from Cook County stating that all of the paperwork was not in fact filed, and that the entire filing had become null and void due to 90 days having passed since the process was started.

In the end, I got my money back, but the entire thing was a waste of time, as MyCorporation never did manage to complete the DBA filing.

My Recommendation

• Go through LegalZoom, or
• Use a local attorney.

Click here to learn more about LegalZoom’s business formation services.

Click here to learn more about MyCorporation’s services.

Full disclosure: I am a member of both LegalZoom and MyCorporation’s affiliate programs. That means that if you place an order after clicking through one of my links, I receive a commission. For what it’s worth, the commission rate on MyCorporation orders is higher, so if you really want to go ahead and use them, be my guest.

With their large advertising budget and amusing commercials featuring money-savvy babies, E*Trade has bought their way into the minds of investors. But are they actually a good place to invest? I recently opened an ETrade IRA to find out.

E*Trade Costs and Fees

E*Trade charges no annual fee for an IRA. They have a graduated cost structure for stock/ETF trades:

• A flat $9.99 commission per stock or ETF trade, or
• $7.99 per trade if you place 150 or more trades per quarter.

That’s a bit more expensive than some other discount brokerage firms, but it’s not entirely unreasonable.

E*Trade does not charge any commission on purchases of U.S. Treasury Bonds (including TIPS) when you buy them at auction. As far as I know, the only other brokerage firms that allow for commission-free Treasury purchases are Schwab and Fidelity. For investors with a sizable fixed-income portfolio, this can be a big money saver.

E*Trade Mutual Fund Marketplace

At E*Trade, you’ll also have access to a “no transaction fee” marketplace with over 1,000 no-load mutual funds. That said, many of the high profile fund families (Vanguard or Fidelity for instance) aren’t available without a transaction fee.

Free Trades for the First Month

If you open an IRA prior to 12/31/2010, E*Trade will give you free trades for the first 30 days (up to 100 trades). If you’re a buy & hold investor like myself (I place approximately 2 buy orders each month), this obviously isn’t that big of a deal. That said, free money is free money. No complaints here.

E*Trade Customer Service and Website

E*Trade’s email customer service isn’t the speediest. (You might not even get an answer back on the same day.) On the other hand, in my experience calling and asking the automated system for a customer service rep, I’m immediately connected to somebody who can answer my questions.

Perhaps my favorite thing about E*Trade is how fast and easy it is to fund my account. At Vanguard or Schwab, it takes a couple days for an online money transfer. At TradeKing, you have to write a paper check and mail it to them. At E*Trade, I can do an online transfer and have the cash available to invest on the same day.

Summary

Pros:

• Reasonably cheap trades,
• Easy-to-use website with same-day money transfers,
• Commission-free purchases of U.S. Treasury bonds,
• Free stock/ETF trades for first month,
• Quick response to customer service phone calls.

Cons:

• (Slightly) less expensive stock/ETF trades are available elsewhere,
• Slow response to customer service emails.

Open an E*Trade Account

If you think that E*Trade sounds like a good fit for you, here’s the page where you would open an account.

Update: Over the last couple years, several brokerage firms have begun offering entirely commission-free trades on stocks and certain ETFs. As a result, for most investors these days, I’d suggest using a different firm rather than Scottrade. (See here for why we’ve moved our money to Vanguard.)

Back in 2001, I opened a Roth IRA with Scottrade. I kept it there for several years, and for the most part, I was quite happy with it. After all, there’s plenty to like about Scottrade:

• They offer low-cost purchases of ETFs and other stocks–it’s been $7 per trade for several years,
• Their online interface is easy to use,
• There’s no annual fee for having an IRA with them,
• Their customer service is pretty good, and
• They offer access to tons of no-load mutual funds.

So why don’t I use Scottrade anymore?

One reason: They don’t allow for automatic reinvestment of dividends with ETFs. Every time an ETF pays you a dividend, that money will sit in cash until you pay another $7 to invest it. And even if you don’t mind paying $7 to reinvest your dividends, Scottrade doesn’t allow for the purchase of fractional shares, so you’ll have a little money sitting in cash regardless.

Important note: With regular open-end no-load mutual funds, Scottrade does allow for both:

• Free, automatic dividend reinvestment, and
• Fractional share purchases.

Would I recommend Scottrade?

That depends on what you intend to invest in:

• If you intend to stick with your typical no-load mutual funds, then yes, I think Scottrade is a great place to invest.
• If, however, you intend to invest via ETFs (or other individual stocks), there’s no reason to have your money sitting on the sidelines when you could just go to a different brokerage firm–TradeKing, for example–and sign up for (free) automatic dividend reinvestment.

If you think Scottrade sounds like a good fit for you, here’s the link to the page where you can open an account.

Update: TradeKing no longer allows for the purchase of fractional shares with their dividend reinvestment program. In addition, other brokerage firms have begun offering entirely commission-free trades on several ETFs. For most investors these days, I’d suggest using a different firm rather than TradeKing. (See here for why we’ve moved our money to Vanguard.)

I’m a big believer that one of the most reliable ways to improve your investment returns is to reduce your costs. Exchange Traded Funds (ETFs) purchased through TradeKing are an extremely low-cost way to invest.

[Background information: ETFs are essentially index funds that trade like regular stocks. In many cases, they have even lower expense ratios than traditional index funds.]

When buying ETFs, you’ll have to pay a commission for each purchase. However, at TradeKing, the commission per purchase is only $4.95, so if you plan to own the investment for an extended period–or if you’re investing a large sum of money–the super-low ETF expense ratios should more than make up for the small commission.

Free Dividend Reinvestment

One important point is that TradeKing also offers free dividend reinvestment. For somebody buying ETFs in an IRA, this is important. Better to have the cash reinvested right away rather than having it wait around.

How is TradeKing’s Customer Service?

My wife and I have only had a few interactions with them as of yet. But the answer is definitely “so far, so good.” I’ve contacted them via email twice and received replies very promptly. My wife has also called once in regard to her own IRA, and she reports that the service was great. Polite and helpful customer service rep and very short wait time.

In Summary

There’s no way I can promise you that you’ll be happy with them. All I can say is that I’ve been very pleased so far.

Opening an Account

Go to this page to open an account. The application process takes a few minutes, but it’s very straightforward. (The second page is where you’ll designate the type of account you want to open–regular brokerage account, traditional IRA, Roth IRA, etc.)

A decade or so ago, one of the big factors in terms of deciding where to open an IRA was the quality of investment options available through each brokerage firm. Now, however, you can create a low-cost, diversified portfolio just about anywhere using ETFs.

That leaves you with four primary things to consider when selecting a brokerage firm:

• Account minimums (if you’re just starting out),
• Account fees,
• Commissions per trade, and
• Quality of customer service and online interface.

That last one is rather hard to quantify, and different people care about different things anyway. The first three factors, however, can be put in a nice little chart for easy comparison.

Discount Brokerages (Sorted by Cost per Trade)

*TradeKing’s dividend reinvestment program for stocks/ETFs only works for whole shares. They do not allow for the purchase of fractional shares.

Special Deals

Vanguard, Schwab, Fidelity, and TD Ameritrade each allow for commission-free trades of certain ETFs.

Hope that helps. Good luck with your new IRA!