if you never earn enough money to be able to afford to invest
That’s a misconception. You can now buy shares in fraction depending on the investment platform. You can put however much money you want. Of course, the fewer shares you buy, the fewer the returns should the stock price increase (and fewer losses if share price goes down).
You can still invest $10 in a share price of $100, which means you own one-tenth fraction of a share. Even a broke person have $10 (unless you’re homeless, which is understandable, saying “I’m broke” is most of time a hyperbole and does not mean you only have your clothes on your back).
I’m surprised I’m the only person yet on Lenmy who corrected that you don’t have to be rich to buy shares to invest; usually someone would have done so almost immediately when it comes to this thing. Even a blue collar worker throughout his entire career can be a shareholder with 97 holdings and eventually become rich, like literally.
To build off of this, the best thing an average (American) Jane/Joe can do is pile money into their 401k and when they switch jobs move the money from the 401k into a (Roth)IRA
Individual investors can basically never beat the market no matter how smart they are nor how many hours the pile into their research. Best to just pile the money into diversified fund containing a solid mix of stock indices and bonds. If you want to be extra smart, deposit more while the market is down/super unstable so you can ride the wave up when the market grows again.
There’s generally advise to not invest if you have high interest debt and to instead pile your spare cash into paying that down. My personal opinion is that if you’re someone who has a consistent revolving balance of debt just start shoving spare cash into a retirement account (and don’t touch it!) because that can at least build up while you slowly get your debts under control and while maybe you won’t pay off your debt as quickly, at least you have something already saved and compounding 10 years from now once everything is stabilized and paid off
If I’m remembering correctly IRA is pre-tax money and rothIRA is post-tax money, and you can do a Roth conversion on a traditional IRA if desired, pay the income taxes now then have no income tax to pay on it when you pull out at retirement and it’s gained quite a bit through compound interest
yes Roth is not free you pay taxes when you convert as income vs paying taxes later after you retire for traditional 401k typically most people take far less income in retirement so you tend to be in a lower bracket than your earning years so deferring tax makes sense but nobody can tell you for certain how much taxes will be in the future or how productive the markets will be so ultimately it’s all a guessing game
That’s my secret trick: if you never earn enough money to be able to afford to invest, you lose nothing when the market crashes
That’s a misconception. You can now buy shares in fraction depending on the investment platform. You can put however much money you want. Of course, the fewer shares you buy, the fewer the returns should the stock price increase (and fewer losses if share price goes down).
Being broke is a misconception?
You can still invest $10 in a share price of $100, which means you own one-tenth fraction of a share. Even a broke person have $10 (unless you’re homeless, which is understandable, saying “I’m broke” is most of time a hyperbole and does not mean you only have your clothes on your back).
I’m surprised I’m the only person yet on Lenmy who corrected that you don’t have to be rich to buy shares to invest; usually someone would have done so almost immediately when it comes to this thing. Even a blue collar worker throughout his entire career can be a shareholder with 97 holdings and eventually become rich, like literally.
And if you don’t have $10?
To build off of this, the best thing an average (American) Jane/Joe can do is pile money into their 401k and when they switch jobs move the money from the 401k into a (Roth)IRA
Individual investors can basically never beat the market no matter how smart they are nor how many hours the pile into their research. Best to just pile the money into diversified fund containing a solid mix of stock indices and bonds. If you want to be extra smart, deposit more while the market is down/super unstable so you can ride the wave up when the market grows again.
There’s generally advise to not invest if you have high interest debt and to instead pile your spare cash into paying that down. My personal opinion is that if you’re someone who has a consistent revolving balance of debt just start shoving spare cash into a retirement account (and don’t touch it!) because that can at least build up while you slowly get your debts under control and while maybe you won’t pay off your debt as quickly, at least you have something already saved and compounding 10 years from now once everything is stabilized and paid off
Don’t you have to pay taxes on the 401k balance that you transfer to the Roth?
If I’m remembering correctly IRA is pre-tax money and rothIRA is post-tax money, and you can do a Roth conversion on a traditional IRA if desired, pay the income taxes now then have no income tax to pay on it when you pull out at retirement and it’s gained quite a bit through compound interest
yes Roth is not free you pay taxes when you convert as income vs paying taxes later after you retire for traditional 401k typically most people take far less income in retirement so you tend to be in a lower bracket than your earning years so deferring tax makes sense but nobody can tell you for certain how much taxes will be in the future or how productive the markets will be so ultimately it’s all a guessing game
Do they also pay out partial dividends on shares that provide them?
Yes, they still pay fractional dividends in proportion to how much you’ve invested depending on the platform.
Thank you!