Everything has its price. Whether you are making a purchase, selling an item, or making a choice, something is being trade for something else. You could choose to work twelve hours a day everyday until the day you die, but what you give up is personal wants and desires. Perhaps you say “I need to work for my family.” Perhaps you are a single parent with no other choice but to work endless days that begin to blend together.
Perhaps you’re single living on your own and making a good living, but your job keeps you distracted from pursuing dreams of traveling and exploring our world. Maybe you’re not sure where you want to go and want to try many things before making a choice. No matter what your situation is, we all have one valuable thing that most don’t consider when making our choices: time.
As children we drift along not thinking of the future only to grow up and realize that time is always running short. We have to chase a bus or train to get to work, people have deadlines to make, and every second is one step closer to know whether our choices were good or bad. Everyone worries about time in one way or another but most don’t know how to wield it to their advantage.
Finance, Economics, and Banking teach “Rule of 72,” which tells how many years for your money to double based on annual rate of interest (ARI). What you do is take the number 72 and divide it by your ARI. The result is how long your money would grow. Most banks offer less than 1% with savings accounts, resulting over 72 years to doubling your money. Thing is there are other accounts besides savings accounts.
With time being our most valuable asset, an individual retirement account (IRA) is “the working person’s” best friend. What it is helps people save for retirement with higher interest rates on average compared to regular savings accounts. The reason is because you are securing your money away until you are age 70.
Your money is so secure, that not even the government can take it away from you. For a Traditional IRA, you can take money that you earn BEFORE TAXES and put it away. This lowers you into a tax bracket when you go to pay your taxes within the next few months. Although that might sound like an attractive offer, an IRA-Roth takes money AFTER TAXES. At first you may ask yourself what benefit would this offer: ALL INTEREST EARNED IS TAX FREE!!! This legal way to make “free money” is available to everyone. Putting money in any one of these accounts is a necessity for the modern household whether your part of a family, single on your own, or someone who is just starting out in the real world.