A Workout Mind Hack You Can Use For Your Finances
When you’re trying to start an exercise routine, many experts suggest that you should tell yourself that you only have to go for ten minutes. If you don’t feel like continuing after ten minutes is up, you can go home and plop back down on the couch for more reruns of King of Queens. It’s so much easier to convince yourself to go for that run, bike ride, etc when you know that it doesn’t have to be an hour of misery.
So, you get out the door, fully intent on coming back in ten minutes. But, once you start going, you think to yourself “Well, I’m already out here. I’ve sweated enough that I’ll have to take a shower. I might as well go a little longer.” You’re likely to keep going once you’ve broken that metaphorical coefficient of friction.
The same effect can be applied to saving. The thought of saving up a couple million dollars for retirement can seem daunting. But, forget about that end goal in the beginning. The only thing you need to do right now is get started. Tell yourself that the only thing you have to do is set up a Roth IRA and put SOMETHING in it. Whether it’s $1, $10, or $50, it doesn’t matter. Just put something there every month. What you’ll find is that you’ll probably start bumping that number up as time goes by. You’ll be motivated by the fact that you’re making progress, and it will be easier to contribute as the balance grows and grows.
So for today, the only thing you have to do is get started. If you want to quit after that, you can. My guess is you won’t.
7 Surprising Facts About Roth IRAs
Did you know that dividends aren’t taxed in a Roth IRA? Or, that you can use up to $10,000 for your first home purchase?
Check out the link above for more great features of Roth IRAs.
Q:I am debating whether to invest in a Roth IRA or just build my own investment portfolio from stocks and bonds. I have about $5,00 saved up and plan to invest around 5,000-10,000 every year for then next 5 years (according to my current income). I do not have any existing investments right now and just want to get started. I guess future security (retirement) is the most important thing for me right now (I am 23yrs old now) but I would also like to have some possible growth in the next 15 years.
Why not do both? The only downfall of an IRA is that you can’t access it until later in life, so it is important to make sure that you don’t lock up every penny that you can save.
Given your age, the money that you put in the Roth should be pretty aggressive. Any money that you plan to access within the next few years outside of the Roth should be invested much more conservatively.
