Roth IRA

Before investing money, it is best practice to be completely out of credit card debt.  If you are someone else's investment, meaning you're paying 20% interest to a credit card company, its best you don't invest until you have these funds free.  Also, get a $1,000 emergency fund first. 

Investing.  That old dude Warren Buffet, is known for investing, right?  Yes, the billionaire investor.  He started investing at age 11 - and look where he is now.  I'm no hedge fund manager, nor a stock analyst, but I do have a nice looking retirement account.  When I was 26, fresh college graduate, my company I signed papers for my 401(k) that my company was going to contribute money to my retirement for free.  I really had no idea what a 401(k) was at this time, and my dad had to educate me on how awesome it was that my company was giving me free retirement money.  Now, I'm no longer working for that company, but I do continually contribute to a Roth IRA and I still have that nice 401(k) waiting for me 30+ years from now.  

What is a Roth IRA you ask?  The most versatile retirement account out there.

Benefits of a Roth IRA:

• This money grows tax free.  So you get your paycheck (that you paid taxes on), then you put this money in your Roth IRA.  When you are 65 and start using this money, you do not have to pay taxes on all that grew.  Most other retirement accounts you will pay taxes on when you start using it at 65. 
• Working minors can contribute -- I am for sure encouraging my kids put money in their Roth IRA when they start getting taxable income. ($1,000 initial investment and $16 per month for 50 years turns into 1 million dollars with 12% interest)
• You can withdraw from you contribution to this account at any time for anything penalty and tax free.  However, you are damaging your ability to grow money for your retirement since that money is no longer there.  I like to keep my retirement accounts strictly for retirement, so I definitely don't recommend withdrawing from this account at any time.
• You are able to withdraw the entire account penalty-free before the age of 59 for: purchase of a new home, birth/adoption expense, education expenses, medical expenses or health insurance.

Drawbacks of a Roth IRA:

• There is an income cap - it changes, so check here for most updated information from the IRS.  If you make over a certain amount of money in a year, you are unable to contribute.
• You can only contribute $6,000 per year, $7,000 if over 50.
• For those undocumented without a ITIN or some sort of government issued ID, it will be difficult to find a company willing to open an investing account for you.  I wasn't able to find anything online, but it will definitely be worth looking into.

Steps to set up a Roth IRA:

1. Go to any online brokerage firm page, Nerdwallet has a great summary of the top ones.  It's kinda like a bank, they don't differ too much - just depends on personal preference.  Just make sure there are not hidden fees associated with your investments.  And just like a bank - you can easily switch over your funds to another brokerage at any time.
2. You can immediately transfer funds into your investment account from your bank account.  They only accept cash.
3. Invest!  Now is the time to get educated!!  I'll cover types of investments in this (future) post.  It really isn't that complicated, but are definitely riskier than your sheltered bank account.

Off to the races!  Investing is a personal thing, and you will find what works best for you as far as what accounts, brokerage, and types of allocations work in your life.  You will also need to decide what kind of time you can dedicate to caring for these dollars.  Unless you are in the millions, it doesn't make sense to pay big bucks to financial investment advisor do the investing for you.  Warren Buffet, that billionaire investor, got his billions by  spending lots time studying from the best investors, and trying to see what worked for him.  He constantly monitors the stock market - to this day!

Best of luck in your investing, with continued education on what works best for you, you will be very successful, and profitable at investing!  

Contact me on all platforms @road2more and let me know if you have a Roth IRA, and what type of investments you like best!

Investments include risk of loss.  This website includes opinion only and should not taken as professional investment advice.  These recommendations do not guarantee any specific outcome or profit.