Suze Orman Says You Have A 'Golden Opportunity' To Make Your Kids Millionaires With This Simple Yet Little-Known ... - Yahoo Finance | Canada News Media
In an era where building generational wealth and securing a better future for the next generation are at the forefront of many people’s minds, financial guru Suze Orman offers a simple yet powerful suggestion: the Roth IRA.
Orman emphasizes the potential of a Roth IRA to significantly impact a young person’s financial future in a July 2023 blog post. She said, “You have a golden opportunity to launch them to their first million dollars.”
She illustrates the long-term benefits of saving early and consistently, noting that a young erson saving $2,500 annually for 50 years could amass over one million dollars tax-free, assuming a 7% annual return on their Roth account.
Don’t Miss:
For many first-time buyers, a house is about 3 to 5 times your household annual income –Are you making enough?
Are you rich? Here’s what Americans think you need to be considered wealthy.
Orman suggests an approach to encourage young people to save for retirement, recognizing the challenge of convincing them of its importance. She proposes offering a matching contribution to their Roth IRA, which can be a powerful incentive. She points out that anyone can contribute to someone else’s Roth IRA as long as the recipient has earned income and emphasizes the value of starting the habit of saving early.
To make the concept of compound growth more tangible, Orman recommends using online calculators to visualize how consistent savings can lead to significant wealth over time. She stresses the importance of starting early to maximize the benefits of compound interest.
For those under the age of majority in their state, Orman mentions the necessity of a Custodial Roth IRA, where an adult initially owns the account until the young saver reaches the age of 18 or 21, depending on state laws. She advises starting with a total stock market index mutual fund or exchange-traded fund (ETF) for a diversified investment strategy and underscores the distinction between saving and investing.
Trending: The average American couple has saved this much money for retirement —How do you compare?
Orman’s advice offers a comprehensive strategy for setting young individuals on a path to financial security, emphasizing the power of early and consistent saving, the benefits of compound interest and the importance of understanding investment fundamentals.
However, it’s important to consider both sides of the coin. While Roth IRAs offer tax-free growth and withdrawals, potential downsides include the absence of an immediate tax break and low maximum contribution limits. These factors might influence the decision-making process for young investors, underscoring the importance of a balanced perspective.
For young investors in their 20s, the emphasis on diversification and the right balance in asset allocation cannot be overstated. A rule of thumb suggested is to subtract your age from 110 to determine the percentage of assets to invest in stocks, with the remainder in bonds, adjusting based on risk tolerance. Diversification across U.S. and international stocks, as well as different cap equities, is more likely to boost long-term growth.
If all this information feels overwhelming or if you’re looking for a strategy that’s best tailored to your personal financial landscape, reaching out to a financial adviser might be your best move. A financial adviser can offer personalized insights and strategies, ensuring that the steps you take today align perfectly with your long-term goals and financial well-being.
Read Next:
*This information is not financial advice, and personalized guidance from a financial adviser is recommended for making well-informed decisions.
Jeannine Mancini has written about personal finance and investment for the past 13 years in a variety of publications including Zacks, The Nest and eHow. She is not a licensed financial adviser, and the content herein is for information purposes only and is not, and does not constitute or intend to constitute, investment advice or any investment service. While Mancini believes the information contained herein is reliable and derived from reliable sources, there is no representation, warranty or undertaking, stated or implied, as to the accuracy or completeness of the information.
“ACTIVE INVESTORS’ SECRET WEAPON” Supercharge Your Stock Market Game with the #1 “news & everything else” trading tool: Benzinga Pro – Click here to start Your 14-Day Trial Now!
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
