Want to know how often you will double your money? Check out the list below and keep saving!
Rate of Return/ Investment doubles every…
2% / 36 years
4%/ 18 years
6%/ 12 years
8%/ 9 years
10%/ 7 years
12%/ 6 years
The big question is where can we put our money to get a 8-12% return?
If you are starting to save young, the advantages are in your court versus people who are older and waited longer to save. Enjoy!
I just saw today that the stock market took a big old dump. It has been this way since the New Year. It needs to get back in order so we all can make some more money. My retirement is shrinking, when it is supposed to be growing. Oh well, I know that it will eventually go back up just like trends show that it will.
It has been depressing (not really…more frustrating) when I check Google Finance and see the daily results.
When will the stock market get better?
I am in no way an investing guru but here are my two cents on how young people getting started out should invest. First and foremost if your employer is giving away free money take advantage of it. If a company is willing to match on a 401k make sure you contribute the amount that they match up to. For example let’s say they match up to the dollar on 3%. If 3% of your contribution from your salary is $50 that means your company will throw in $50 as well. Each 401k and profit sharing plans are different but make sure you get the free money from your employer if they offer it. On top of getting the free money from your current company, set a goal of contributing to your Roth IRA. Max it out!
If you company does not have a profit sharing program then fund your Roth IRA before the basic 401k. If you have plenty of money leftover after your fund your Roth then you can fund your 401k or other investments such as paying down your mortgage. I think 401k’s are a waste without some sort of profit sharing or company match from employers.
So here are some things to plan for investing in 2008:
Does your company have a profit sharing plan? If so, take advantage of it.
Are you funding your Roth IRA always? Max it out!
Here is something I was thinking about the other day. If you put $4,000 a year into retirement accounts starting at 22, you can have $1 million by age 62, assuming you get an 8% average annual returns, which I do not think is hard to find. Think what your portfolio will look like if you make 10-20% gains some years.
