Im 20 years old.....best way to invest for retirement?

Im 20 years old, saving about $600 a month. I want to have a million dollars when I retire. Preferably more, because inflation. Anyways, whats the best way to invest for retirement? IRA? Mutual Funds? Stocks? Please be as detailed as possible. Thanks guys!

You are lightening years ahead of the rest!!! Most 20 year olds are out partying and spending their money, but you... yes, you.... have real VISION!

To start with, I would like you to learn a basic concept...

Separate your thinking into two areas: 1) type of investment and 2) type of tax treatment.

Mutual Funds and Stocks are types of Investments.

Regular IRA, Roth IRA and 401(k) are examples of tax treatment.

When it comes to choosing a type of investment, you should learn basic concepts of managing risk. Modern Portfolio Theory, diversification, dollar-cost averaging, Rule of 72 and Time & Consistency are a few.

Once you have chosen a suitable mix of investments to include in your portfolio, then you may choose a mix of tax treatments. Basically, under the current Tax Code, there are three treatments: 1) pay as you go, as in unsheltered investments, 2) deferred taxes, as in Regular IRA and 401(k), and 3) tax-advantaged, as in Roth IRAs and Variable Life Insurance policies.

In order to choose between alternate tax treatments (2) and (3), ask yourself a simple question: "Do I think tax rates are going up, going down, or staying the same, in the future?"

Hint: Considering, a) the national debt, b) the budget deficit, c) the cost of wars abroad, d) Congressmen's tendency to raise their own salaries and expenses, most people think that tax rates are going up, and I agree!

Diversification in tax treatment styles is important, too. Typically, the longer-term treatment, the more tax advantages... but liquidity is sacrificed.

You can't accumulate $1 Million by investing $600 a month for 45 years? HOGWASH!!!

Consider this... with time and consistency as your friend, if you average a rate of return of just 8%, $400 per month for 45 years will yield over $2 Million!

What to do with the other $200 a month? Oh... I think your future wife will help you figure that out!



Phil
http://www.phillipfostercpa.com/money.ht...

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600 month? you going to have to live a long long time to save a million.

Whatever else you do, take the time and pleasure to invest in old (antique) silver....teaspoons, coffepots, dishes...whatever you like the look of.

These items will always go up in value as there is a limited supply, and they are beautiful and useful objects, with an international appreciation. You do not need to spend a huge amount on any item, but keep an eye out on eBay, or other reputable auctions. You will eventually learn what is good, and find dealers who will help you build your collection. What a pleasure!

Not only will these items steadily increase in value, but you will learn a huge amount about history, culture, art, craft, technology, people, etc. which will be pleasurable and fun.

The only drawback is, these items are easy for burglars to steal, so you will have some security problems if you keep them on display in your home, and they may also tarnish if not kept in proper atmospheres. However these problems are not insuperable, and you will find it interesting and challenging overcoming them.

You will also increase the value of my own collections by joining the market, or if you find it too obscure you could turn to pewter, watercolours, treen, lustreware, English oak furniture, or other genres.

Obviously these investments would only be a fractionally small part of your portfolio, but they would bring you immense satisfaction and pleasure, and may end up beating the performance of other items you invest in.

Otherwise, plain bricks and mortar would be the most likely longterm objective: not necessarily residential investments, but industrial or technical long lease premises.

Good luck.

It is possible to save one million dollars saving $600 a month factoring interest and wise investments. However, economists suggest even more than that. Look into starting a 401K. Contact your bank. Better yet, get a job that will match your 401K contribution. That way, you can double your monthly savings. Also, look into investments that will pay you when you do retire, like real estate and turn key business operations.

If you're 20, you probably still qualify for a tax deduction on a Traditional IRA. Open an account, put the allotted $5000 into it and put it into an index S&P 500 fund while you are researching other investments, like stocks. If you average 7% per year (not too hard to do) and add $5000 every year (which will become much easier to do as your salary increases), then when you're 58 you'll have 1.06 million dollars.

If you add to a 401K, this could amount to several millions.
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One of the best ways to start is NOT TO RENT... Look around for a duplex to buy, live in one part of it and rent out the other, having theses renters PAY your mortgage !! When you decide to move on, you simply sell but all the while earning equity in the place at the expense of someone else.

My son now has 3 rental properties and will turning 21 soon. His renters are basically paying for them an d he simply transfers the property to his name....

Be sure to start an IRA when you ever you can and add to it as much as possible. Even a ROTH IRA will help.

Begin thinking of what will put money in your pocket rather than what will take from it. BUY ONLY things that will make you money, such as stocks, mutual funds, real estate. Keep this frame of mind even when others are down about it and your life will be grand !!

: )

invest 25 dollars in a book, or go to the library and borrow one for free. Those "For dummies" books are great.

Then, think about a 403B/401K if possible. If not, try a Roth Ira.

Talk to as many people as possible, take a tally, then make a move. The worst thing you can do is do nothing at all.