Many people get nervous when it comes to thinking about retirement investing. It can be a very confusing process with complicated terms and options available. However, it is vitally important to save for your future. The earlier you start the better when it comes to saving for retirement. The successful investors are the ones who consistently put money away no matter what the markets are doing. To reach your financial retirement goals there are a couple of options available to most people.
If you work for an employer who offers a 401(k), or similar plan, it is quite easy to save for retirement. Whether or not you use the 401(k) at your job depends on a couple of factors. Many of these accounts are set up by commissioned salespeople who talk employers into using their plans. These plans often have much higher costs than if you invested on your own. Also, many 401(k) plans are very limited in the choice of funds you can invest in. You must compare your 401(k) with other investment options in order to determine whether or not is the right choice for you. However, if your company offers a match to the dollars you invest then it is wise to at least invest up to the percentage that your company matches no matter what the choices are in the 401(k). The reason is because the match that the company provides creates an automatic return on your investment.
If your company does not offer a 401(k) or you do not qualify for it than there is always a traditional IRA. Much like a 401(k), an IRA allows you to deduct the money invested in the taxes you pay. This allows you to put more money to work in your retirement account and you pay taxes later on when you take the money out in retirement. You could easily set up an IRA online with many different companies. You can set up automatic deductions from a checking account or savings which helps make investing for retirement quick and painless.
Another form of the IRA is the Roth. It is identical to a traditional IRA with one big exception. You do not receive a tax credit for the money invested in the Roth. In return, since you are to pay taxes on your investment money, you never have to pay taxes on the money you withdraw in retirement. The best IRA plans are the ones who feature low-cost investing such as Vanguard.
There are many different financial calculators online which can help determine whether a traditional or a Roth IRA is the best choice for you. There are even calculators which allow you to compare a 401(k) with investing in an IRA.
Today many people have become very skeptical about the current market and economy when it comes to saving for retirement. In fact the market seems to have become very volatile over the last few years and some are wondering what they could do to protect themselves today. While you can’t control what the market is going to do you can control where you invest your money and the fees that you pay and in this article we’re going to see which is better fee based investing or traditional investing.
The Traditional Way To Invest
For most people we invest our money in mutual funds. However, most mutual funds will contain as many as three main fees that could cost you a lot over the years. The first fee is the sales charge fee. This fee can run as much as 5% to 6% of every dollar you invest into the account. So if you invest $1000 and have a 5.5% sales charge you will end up paying around $55 in fees upfront.
The second fee that you will have to pay is an annual fee to maintain the account. The money from this fee will go to pay the fund manager, and make trades within the fund itself. Typical fees will range from as little as 0.19% to as high as 1.48%.
Finally, the last fee you may have to pay is a 12b-1 fee. This fee is a junk fee that goes to pay for advertising cost in most cases; however my suggestion is to stay away from these companies that charge this fee.
Fee Based Investing
Mutual funds can still be a good investment option but the problem with them is once you’ve set up the account and invested your money you won’t typically hear much from the representative after that. In fact most of them will enter the witness protection program never to be seen or heard from again because they’ve made their money and moved on.
So you might be wondering what is the best way to go then? The answer is investment advisers. An investment advisor is different because they are fee based and charge a flat fee up front. This fee typically runs around 2% annually. So if you have $10,000 in your account you could pay $200 over the course of a year’s time. On top of that the investment adviser has a vested interest in your account to earn more, because if when you earn more they will earn more as well.
Where To Get Started
So now that we know the difference between traditional investing and fee based investing you might be wondering where should I get started? One of the best IRA companies that does fee based investing is Foxhall Capital. This company deals within a global market place and believes that their is always a bull market somewhere in the world, and as a result they are always striving to keep you there.
So what are your thoughts, is fee based investing better or is it better to stick with the traditional method such as mutual funds?
Do you want to invest your money for retirement but don’t want to get hit up with the high fees? This is why I suggest Lending Club because they have one of the be no fee IRA programs around, and in this article I’m going to show you three simple reason why it’s better to go with Lending Club over other investment programs.
First off, by going with Lending Club you are not investing money in the traditional sense like you do with mutual funds, stocks, and bonds. Instead with Lending Club you are investing your money and lending it out to others who are being charged and interest rate. In fact this method is very similar to how banks earn money but with Lending Club they are managing all of your loans for you.
Secondly, with Lending Club you won’t face the volatility like you do with mutual funds. Mutual funds go up and down everyday from the constant buying and selling of stocks. However with Lending Club you are their is no constant volatility, instead you can invest your money and know that it won’t be bouncing all over the place. In fact I even believe Lending Club can be recession proof since over 40% of the borrowers are using the money to pay off credit card debt.
Finally the last reason you should choose Lending Clubs No Fee IRA program is because they don’t charge any fee to invest. With a typical mutual fund they will charge an initial sales charge which can run around 5% to 6% and they also charge an annual fee that will usually be around 1% to 1.20%. When you compare a mutual fund that invest $5000 in it with the fees I’ve mentioned Lending Club will earn nearly $30,000 more over 30 years than the mutual fund.
In the end a no fee IRA or Roth IRA are the best way to save for your retirement. In fact the best Roth IRA advice I can give you is to avoid the high cost fees and you will earn far more for your retirement than anywhere else.
A weak economy affects everyone. As the economy continues to weaken, more people are going to need making money ideas that actually work. Many of the money making ideas that work in the developing world, street vendors, buying something at the store and reselling it, begging from tourists, are not suited to developed countries. Technology is also changing business practices and the job skills required for almost any job. The following ideas can hopefully help you develop your own strategy for making money and getting through the tough times.
Go Back to School
When jobs are scarce, school enrollments increase. This is a good strategy for short term economic troubles because earning a higher degree not only improves a person’s chances for getting a job, but that person is also eligible for loans, grants, and other financial assistance to cover both the cost of attending school and associated living expenses (housing, food, etc.). Unlike 20 or 30 years ago, there are now many schools that cater to the schedules of working adults and it is possible to take all of your courses at night or online. GED classes are offered for those who were not able to finish high school and community and online colleges offer many options when it comes to getting a 2 or 4 year degree. In short, returning to school is one of a few making money ideas that can both help you earn more over the long term and help you get access to some extra money quickly.
Working at Home
Another big industry that seems to be flourishing is that of working at home. Many people dream of working at home, having their own business, and being their own boss, but finding legitimate work from home jobs can be quite difficult. Many people have tried working for direct selling companies, but they usually find that the compensations plans leave them without enough money to live on. Others try online freelancing, but are often bidding against people from other parts of the world who are willing to work more cheaply. Some people have used selling old collections and other family stuff online as a way to temporarily make more money. Some of these jobs are better than others as making money ideas. Ultimately, the best way to make any of these work at home ideas succeed is to develop a relationship with someone who can supply with a constant stream of work. Continuing work can often be more valuable than getting a higher rate of pay for an isolated job.