As many of us get geared up for Black Friday and the “incredible” deals the day offers we must ask ourselves: “Is this purchase something I truly need?”.
Take an investing look at a discretionary purchase you make this weekend.
For every $1.00 you spend today, you are potentially costing yourself an additional $10 in 30 years. For example, say you were to purchase a new TV on sale for $500. If you were to instead take that $500 and invest it in a retirement account or a brokerage account (and let the magic of compound interest take hold) it could be worth a whopping $5000 in 30 years! This assumes that you put the money into a portfolio returning 8% annually and allows the dividends to reinvest.
So before you jump the gun on an impulse purchase this holiday season ask yourself: “Is this dollar I’m spending now really worth the ten dollars it could be in 30 years?”
The choice is yours. Budget smart and invest wisely!
In your 20’s? Recent grad? Do you have a company 401k?
If you answered yes to any of these questions then you have the OPPORTUNITY to be well prepared for retirement when it comes many years down the road.
Many young individuals get their first job and are advised to put in enough money to their company 401k to receive the full company match. Do this!
However, many assume that this is sufficient for retirement planning/saving. It might be, but then again isn’t it better to be safe than sorry?
In comes a Roth IRA. Roth IRA’s have a yearly contribution limit, they have income limits, but the money you put into it is NEVER taxed if you follow the rules. The amount you can contribute to this retirement vehicle if you’re under the age of 50 is $5,500/year or $458.33/month. Since most young people will make less than $114,000 if you’re a single income tax filer, then it makes perfect sense to contribute to a Roth IRA.
Check the following link to learn more about Roth IRA rules and get one started now. You’ll thank yourself later.