Why and How to Start a Roth IRA for your Child | Should You Wait for a Dip to Buy Stocks?
20m
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Invest Smarter
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Today we talk about Roth IRAs for your kids and why you shouldn't wait for a dip to invest.
Outline of the Show
Roth IRA for you kids [4:06]
Don't wait for the dip [14:00]
On today's show, we talk about why and how to open a Roth IRA for your child. Roth IRAs are super powerful. You put after-tax dollars into it, and you take the money out tax-free in retirement when you are over age 59 ½. Now if you have kids, I want you to consider opening a Roth IRA for them. And let me tell you why. Here are a couple of reasons:
Education
Opening a Roth IRA for your child can help them become smart with their money. You can have them engage in investment decision-making. Maybe they are really into video games. You can have them invest in the companies that make their favorite games. Maybe your daughter loves fashion. You can research fashion companies to invest in.
The Power Of Compounding
This is also a great way to teach your child the power of compounding. Show them how much their summer earnings could grow by investing it instead of spending it.
We go in this and much more on today's show.
Listener Question
Michael wants to know if he should wait for a dip to put money to work. I break down my answer for him and illustrate why I think waiting for a correction is the wrong way to go about it.
New Website!
The Invest Smarter Podcast has a new website! Go to www.investsmarterpod.com to check it out. You can subscribe to our newsletter right from there and get our eBook, "Successfully Navigating the Market Cycle.
Articles Mentioned in the Show
- Time Horizon is Everything
- Personal finance legislation
- Financial Literacy Study
Connect with David DeWitt
- Subscribe to the Invest Smarter Newsletter (Bottom of the page)
- Get a Free Financial Assessment
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