Many of us learn about the topic of investing throughout our elementary, middle school, high school, and college careers. We may be familiar with the idea, but how comfortable are we to actually following through and taking a dive into investment? Through personal survey I have come to find that teenagers aren't terribly active in the field of early investment for their futures.
While focusing on the now is important, it usually behooves us to think about things like our well-being in the long run. By starting with investment early in your life, you will be giving yourself one of the easiest and doable foots forward. Making decisions now that you won't regret later isn't necessarily a college student or high school students forte. Nonetheless, investment shows discipline, smarts, and long term goal planning to those that are looking to differentiate you from the rest of the crowd. Now that we have established the pros to investing, what is one of the best ways for young people to invest?
A Roth IRA is an extremely beneficial kind of account that is great for young people to start building their future. The acronym IRA stands for Individual Retirement Account so it has everything to do with your future means. The main difference between a Roth IRA and a Traditional IRA or other retirement accounts is the taxes. When you use a Roth IRA, the taxes that you pay on the contributions to the account are paid on the way into the account. What does this mean for the investor? Well, when taxes are paid up front it gives the investor the ability to have their money grow in a tax free environment. That is, when the money comes out of the retirement fund, it already happens to be taxed and there are no other penalties to pay.
What is the reason you should invest in a Roth IRA now? One of the biggest reasons I can give you is that everyone has the potential to be a future millionaire that follows this piece of advice. Now, don't forget that due to the rising cost of living being a millionaire will mean slightly less in the future. Even though being a millionaire may mean less in the future, you will still be significantly ahead of everyone else in the financial game. If other variables in your life are done correctly, you have the potential to live an extremely comfortable life and help others with the smart choices that you have made.
