1 Way To Become A Millionaire

It’s called a Roth IRA. A different kind of investment vehicle you need to know about. You can open one on almost all brookerage platforms. One of the very few things I enjoyed learning about in high school was my economics teacher teaching me about one way he has become a millionaire. Through his Roth IRA

What Is It?

A Roth Ira is an investment account where you can buy stocks and funds just like an individual account. There are some major differences however…

Maximum contributions are $6,000 per year
The money you put in is considered “post-tax money.” Money that has been taxed by your income, then contributed to your Roth IRA.
Once you take the money out at 59.5 years old, you ARE NOT taxed on it.
At any point in time, though it’s not smart, you can pull out your principle contributions. The gains must stay, or you can take them out with a 10% penalty AND get taxed on top of that.

Why I Have One

Many people will say Roth IRA’s are a waste because you can’t take money out easily, and you can only contribute $6000 a year. While those points are true, I still have one, here is why.

I’m young and struggle to max out the $6,000 mark.
I make sure I have money stored away for emergencies, so I dont have to pull my Roth IRA money.
My account pairs nicely with my long term strategy.

The main part I love about a Roth is the tax free withdraw once you turn 59.5. The gains from comund interest plus tax free, can make you a millionaire.

My Roth IRA Strategy

In my account I buy very conservative and lower return stocks. But there are a few riskier ones. I know these stocks will go up in the long-term, and by a lot when I am 59.5 years old. Compound interest will do the gains for me, so I dont have to worry about picking the absolute best stocks. I contribute $150 every month, this will go up as my income increases over time. Check out my other post on compund interest (https://atomic-temporary-175695722.wpcomstaging.com/2021/04/09/compound-interest-the-8th-wonder-of-the-world/).

I have a seperate individual account where I have a riskier strategy that returns more. In this account I also buy & sell more often, actively manage it, and contribute more each month. I use my Roth as a “safe haven” investment.

My Roth Holdings

I hold a lot of different index funds that M1 Finance, provided for me. For the most part, these track the overall market. The individual stocks I have are top 20 biggest companies in the stock market. So they are safe, but return more than the index funds.

I started my account 8 months ago, so my balance is low. I plan to have my principle balance around $2500 by the end of 2021.

Get Started

Roth IRA’s are a great tool to have in your investment portfolio. I like my approach, it works for my goals. I’m not saying you need to copy my exact formula. But take it into consideration.

Open your M1 Finance account today! https://m1.finance/-It9Yn7neCcV