Do you want to make some money? Part 3

In the past two blogs, you have seen what I am doing with my IRA. One of the smartest money moves a young person can make is to invest in a Roth IRA. Follow the rules and any money you put into one of these retirement-savings accounts grows absolutely tax free. You won't owe Federal Taxes at all even when you cash out in retirement. This is how I am able to use the Mathematical rules of 72, doubling my money and 115, tripling my money. When I am in retirement, I will be able to withdraw money tax free.


Plus, a Roth IRA is more flexible than a 401(k) from your employer and from other retirement plans because you can invest it in almost whatever you want, from stocks and mutual funds to bonds and real estate. This is why this type of Account is ideal for investing in discounted corporate bonds.


I did not always have the money to start an IRA. I got my first chance to start an IRA in 1982. If you don’t have a Roth IRA and you are working, open one now. You have until your tax return deadline April 15, 2011 to set up and make contributions for the previous tax year 2010. The government sets a limit on how much you can contribute to a Roth IRA. That limit was $5,000 for 2009 and also for 2010. That means if you act before April 15, 2011 you can invest up to $5,000 for the tax year 2010, giving you a solid start to your savings. You have until April 15, 2012 tax deadline for tax year 2011 to hopefully invest up to $5,000 for year 2011.


I am sure you are saying that you don’t have $5,000 to save every year. Most people don’t but many can plan to save and build an IRA. The trick is to start early. Let’s say that you bring home $600 twice a month and your mate does the same. That is $1,200 two times a month. Open two IRA accounts with you being the beneficiary for your mate’s and your mate’s being a beneficiary on your account. From each account that you and your mate open at your bank or Credit Union, you automatically deposit 10% of your checks into the two IRAs. Your employers or your banker can help you set automatic deposits from your pay checks. That is $600 times 10% equals $60 each. You both are paid 24 times a year giving $1,440 for each IRA Account. Over 10 years, that is $14,400 in each account or $28,800 for both.


Once over $5,000 in your bank Roth IRA, you want to start transferring money over into a new Roth IRA at the online brokerage firm that I mentioned in Part 1. Open one for you and one for your mate. Every few years, you want to transfer money from your bank IRA to your online brokerage account. At that time you want to invest in discounted corporate bonds as was discussed in Part 1 and Part 2.


If you invest $1,440 per year for 10 years at a rate of 10% for 40 years, you will have $440,508.07. If both of you follow the same investment strategy, that is $440,508.07 times 2 or $881,016.14. See figures below. I am only talking about starting January 1, 2011 and stopping on December 31, 2020. You will have $440,508.07 or $881,016.14 in the year 2050.


If you get paid every two weeks and invest $60 per pay, you will have $835,962.52 for one account and $1,671,925.04 for both accounts. Pennsylvania State workers are paid every two weeks.


I already showed you that making 10% or more per year is very easy with discounted corporate bonds. To do this, all it takes is time, a little strategy, making your objectives, and $60 every 15 day or two week pay from both of your paychecks for 10 years. I showed you how to do it with no strings attached. If you have the will, you will make the money!

Starting with $60 twice a month on January 1, 2011

End of 2011 investment, you will have $65,173.33 making 10% per year until January 1, 2050.
End of 2012 investment, you will have $59,248.48 making 10% per year until January 1, 2050.
End of 2013 investment, you will have $53,862.25 making 10% per year until January 1, 2050.
End of 2014 investment, you will have $48,965.69 making 10% per year until January 1, 2050.
End of 2015 investment, you will have $44,514.26 making 10% per year until January 1, 2050.
End of 2016 investment, you will have $40,467.51 making 10% per year until January 1, 2050.
End of 2017 investment, you will have $36,788.64 making 10% per year until January 1, 2050.
End of 2018 investment, you will have $33,444.22 making 10% per year until January 1, 2050.
End of 2019 investment, you will have $30403.84 making 10% per year until January 1, 2050.
End of 2020 investment, you will have $27,639.85 making 10% per year until January 1, 2050.


All 10 years total $440,508.07 in the year 2050.


You and your mate invest $60 each every 15 days or twice a month, it comes to $881,016.14!