I put part of this year’s Roth IRA money(*) into Costco. In part, it was because they have industry leading productivity and revenue per-square foot. In larger part, it’s because they pay their workers more and because they offer benefits (CEO Sinegal said back in the early 1990s, “We pay $1 more an hour than Sam’s or Price … We start our people at $8 an hour and boost them in three years to $14 an hour. It works for us. If you pay good wages, you get better productivity.”) Now I find that there’s yet another reason to support Costco:
Costco Wholesale Corp. Chairman Jeffrey Brotman and CEO James Sinegal gave $95,000 each in December to a political fund that aims to defeat President Bush in the November election, records filed with the Internal Revenue Service show.
(*) Speaking of Roth’s, it’s that time of year where you should really, really, scrape up some money for either your Roth or traditional IRA. As a rule of thumb, if you have $3,000 available, then you probably make enough so that the Roth is better for you (with a Roth, you get no tax savings now, but the disbursements are tax free). If you don’t have $3,000 lying around, then you should probably put as much as you can into a traditional IRA (the contribution will come off your AGI, increasing your refund). If you’re confused about what stocks to buy, broad-based Exchange-Traded Funds (ETFs) (like the ones described here; you may have seen commercials for “Spiders” (SPDR) and “Cubes” (QQQ), both of which are ETFs) are a pretty good idea. Even if you don’t have much money, most online brokers have low or no minimum balances for a no fee IRA account.
Here’s a proposal I’d like to see analyzed: means-tested matches on a sliding scale to Roth and Traditional IRA contributions, with EITC recipients getting some amount match-free. Of course, that would take some money, which the federal government is about 1 trillion dollars short on in the current and upcoming fiscal years.