The Roth IRA has rules that benefit investors of all ages.
If you’re young and need extra cash, you may be able to extract Roth IRA contributions (tax- and penalty-free) to pay for a new house, car, or bicycle; if you’re retirement age, you may be able to withdraw money without paying taxes. Plus, there are beneficial rules for those who are between starting out and spending down assets.
When I’ve read about investing and considered the services of investment advisory firms, I’ve often encountered the term of asset allocation.
What is asset allocation? A simple definition: it’s putting my proverbial eggs in multiple, uncorrelated baskets. For an investor, this process involves allocating investments among the big three types of asset classes: equities, fixed income instruments, and cash and its equivalents.
Most of my money has been invested in the stock market. But occasionally, I invest in myself. Honestly, I think I should invest more money in myself and my business but my frugality often gets in the way. And, while I rarely hesitate to spend on my children (for summer camps, enrichment programs, musical instruments, sports gear, and college education), I tend to ponder and over-think investments in me.
In addition to my general reticence to spend money, I am often unsure of what investments will pay off. So, while I have come to realize that it’s okay to spend money on me, I still struggle with determining whether an expense today will yield results tomorrow. Still, fortunately, there are notable examples of investing in myself that have reaped benefits, both tangible and intangible.
Here are several investments that I am glad I made:
Are you afraid of revealing your personal financial situation and being judged harshly by financial professionals, your parents, or other people in your social circle? If yes, then you are not alone.
According to a 2014 survey of 2,000+ U.S. adults commissioned by TradeKing Advisors, 57% of would-be investors say that the thought of speaking with a financial adviser in person (either in a face-to-face meeting or on the telephone) has stopped them from investing. Seventy-four percent of Millennials (ages 18-34) and 66% of Gen X (ages 35-44) have allowed fear to paralyze them.
Whether you are part of these generations or not, you don’t have to be afraid.