Investing has a reputation for being a man’s game, full of risks and gambles that most women in their 20s don’t have the patience or the money to partake in. I’m here to tell you that the econ bros are onto something, but there’s a better way to do it. It’s a lot easier to start making your millions now than you may think it is. The secret? A Roth IRA.
It took me until my sophomore year of college to learn what a Roth IRA was, and I didn’t take my accounting professor very seriously when she said that this is the easiest way to make a million dollars. In her words, a Roth IRA is pratically free money, but in a more technical sense, a Roth is an investment fund that gives you returns on any annual investment you make until retirement. The money you put in is invested into a portfolio of your choice, and will continue growing until you are able to take it out tax-free. The stocks you invest in are completely up to you, but you typically want to choose ones that are consistent in their growth and give you a high annual return. For some basic math, a $500 a year investment over the course of 40 years would turn your $20,000 into close to $100k, and it only goes up the more you contribute. It seems too good to be true, you’re practically making free money, but in a world where many people understand the benefits of these investments, you should too. To get started is an easy three step process:
- You need to open your Roth IRA account. This can be done on any major banking site for no fee, and often they will have a step by step guide to help you through the process.
- Choose your investments – it’s safe to go with one of the big three: the S&P, The NASDAQ, or The Dow Jones Industrial Average.
- Keep contributing each year! The government sets a limit to how much you can contribute to a Roth IRA; for 2024 this was $7000, but even the smallest contributions add up over time.
Investing doesn’t have to be a risky move, and it doesn’t take a lot of expendable income to start early. Any contributions you make now will only continue to grow until you are able to use them for your retirement later. If you’re considering investing with your savings, this is a safe and effective avenue for making your millions the easy way.