A Wealthy Idea by Francis Bills

This blog can assist you in achieving financial freedom.

Q. Why do I want you to be financially independent?

A. Because I want you to see that your financial freedom is not contingent upon my financial freedom or anyone else’s.

This is in keeping consistent with the creative mindset.

Q. Why do I say this blog CAN assist you in achieving financial freedom?

A. Because we only benefit from rich ideas and receive value from them when we implement them.

This idea is only one of many that has the potential to contribute significantly to your overall financial health and well-being.

You may have already heard about, are familiar with, or are already investing in this idea.

If that’s the case, please forward this idea to anyone with whom you’d like to see achieve financial independence.

The idea that I’m discussing is investing in a Roth IRA (individual retirement account).

Without getting into specific details about all the rules, risks and requirements, which can easily be researched and verified, I want you to know about a couple of key concepts and benefits of investing in a Roth.

The first and most important is to understand compound interest.

Instead of explaining it here, a quick Google search can provide you with everything you need to know about compound interest and how it works.  

There are also charts and calculators available to demonstrate how quickly your investments can grow given a period of time, investment amount and average rate of return on your investment.

Even if you’re already familiar with compound interest and how it works, you may not be using it yet.

My goal is for you to take action right away and to take advantage of the benefits of compound interest as soon as possible.

You don’t need to be earning a ton of money to invest in a Roth. Even small amounts, consistently invested over time will help you to make a handsome profit.

Compound interest works whether you’re 15, 35 or 55.

The key is to start as soon as possible and let time work in your favor.

Another concept and benefit of a Roth IRA is that your contributions (the money you put into it), is after tax money.

This means that you won’t be taxed on it later, (assuming you follow the requirements of the Roth), when you’ll most likely be earning a higher income.  

Q. How do I invest in a Roth IRA and what are the specific steps involved?

A.

1)     Create an account with Vanguard or any other reputable investment company (I prefer Vanguard but you can choose whichever company you feel comfortable with)

2)   Open a money market account (you’ll need to provide your banking information, including your account number and the banks’ routing number)

3)   Once the money market account is established, you can then begin to invest in a variety of investments, including stocks, bonds, and index funds.

My recommendation to begin is to invest in an index fund that follows the S&P 500.

This strategy has been promoted by many people in the finance industry and for good reason. The S&P has historically had an average return of around 10%.

10% compounded over a number of years can add up to a very large amount.

The way that the S&P was explained to me was that it contains the top 500 best performing companies. If one of the companies isn’t performing well, they get knocked out and a better performing company takes its place.

This explanation sounded pretty good to me, so I decided to invest in a low cost index fund which follows the S&P 500.

Personally, I began with the Vanguard Total Stock Market Index Fund (VTSAX) but there are many to choose from and you can check out how they’ve performed over time and decide which one is right for you.   

The key is to begin as soon as possible and make investing a part of your long-term wealth building strategy.

A Roth IRA isn’t a panacea for all of your financial needs, but it’s a good place to start and it can play a vital role in your overall financial goals.

Remember, the value is in the understanding and the application of the ideas, therefore be sure to take action on this idea as soon as possible.  

If you would like any assistance in setting up your account, let me know.

Most of the websites are pretty user friendly, but if you need any clarification or have any questions about anything, feel free to contact me here at PremierConsulting.biz.

*Disclaimer: I do not work for Vanguard or any other investment company. I am not being paid to promote any companies or products. I am not a certified financial advisor or planner.

Any ideas or suggestions are based on my personal experiences and positive results. I only expect you to take action if an idea resonates and makes sense in your particular situation.

Again, if you feel that this information was valuable, please pass it along to anyone with whom you believe could benefit from it.

Thank you,

Francis Bills

PremierConsulting.biz