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Investing for Dummies1. Choose a company with a proven track record. No one has the time or spare cash to lose with an investment firm that hasn’t withstood the test of time. At a time when banks are collapsing left and right, the first step to investing for dummies is choosing a well known name that has proven to be a winner. 2. Know the different types of tax advantaged accounts. First, there are 401k’s, which have a earn now/pay later structure that appeals to many people. They also reduce taxable income, so you can save money without feeling the pinch. In addition, you can choose from IRA’s with the same advantages as well as Roth IRA’s that are set up to allow you to pay the bill right away. There are so many different types of accounts that even the smartest amateur can’t keep up, so be sure to speak with a professional financial advisor before signing on the dotted line. 3. Save regularly from a young age. Because of the miracle of compound interest, saving a little money for the first decade or so of your working life will leave you with more money than saving a lot over the rest of the time. The sooner you get on the ball and start investing, the better and smarter you’ll be. 4. Don’t be afraid to get a late start. Although it is definitely better to start investing for dummies early, it is never too late to make a dent in your retirement needs. Aggressive investments and a little self sacrifice as well as a few favorable government policies can help you make up for lost time. 5. Avoid early withdrawals. Does a ten percent penalty sound like a lot of money to give up? What if you add that to a flat tax of another ten percent? If that isn’t bad enough, you’ll have to pay income tax on whatever is left over. In the end, almost half of the money you worked so hard to acquire will be donated to the United States government. This doesn’t even count the amount of money lost in uncollected dividends. The only way to avoid this is to let the accounts work the way they were meant to: over several decades, untouched until you are of legal retirement age. Even if you are not a dummy, these simple tips will help you get started planning for the retirement that you’ll deserve after several long decades in the work force. Do you want to spend your retirement counting pennies or cruising the Caribbean? A little planning can make all the difference. Investing for Dummies Go Back To Salary Info Page
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