New to the forum looking for some advice on where to open a Roth IRA account. I am 26 years old with no debt and contributing 20% to my employer's 401k. At this point in time I don't feel I have enough knowledge to manage my own account. Been looking into robo-advisors like betterment (current leader), wealthfront, acorn, or going with a Vanguard target-date fund. Been doing research on both but thought maybe somebody could lend some advice on which route to go? Thanks
Tue Mar 07, 2017 11:41 pm
oldguy Senior Member
Cash: $ 715.40
Joined: 21 May 2006
quote: At this point in time I don't feel I have enough knowledge to manage my own account.
Investing, becoming wealthy, has an interesting dichotomy. In THEORY, investing is very complex - stocks, ETFs, mutual funds, puts/calls, straddle options, Elliot Waves, Fibonacci Series, yada. But reducing the theory to PRACTICE is deceptively simple.
The simple version is in this book "The Little Book of Common Sense Investing" by John Bogel (founder of Vanguard). Costs about $15 on Amazon. The book is only about 7 years old, but it is the exact method that I used for over 35 years. I gave a copy to my daughter.
Give it a read - I think, with your new knowledge, you will scratch betterment, etc.
Good job on the 401k and the Roth idea.
If you invest $500/m in an 11%/yr fund, you'll have about $2,000,000 at age 60. (The power of compounding is a wonderful thing, all it takes is "time"). You can adjust the $500/m to match your goal - eg, $250/m = $1,000,000, $1000/m = $4,000,000 and so on.
Wed Mar 08, 2017 2:29 am
Cash: $ 380.25
Joined: 09 Feb 2009
I agree with what Old Guy is saying about investing in the stock market for the long term, because what you have going for you is time and compound interest. When I was in my late 20's I put 6k in the S&P500 and after 5 years took it out and took a 40% tax hit to pay credit card bills for not spending wisely. Now I'm 46 and that 6k could be worth 54k. Wow, that credit card spending was really stupid.
Risk comes from not knowing what you're doing. (Warren Buffet)