Jack’s Cash

Well I am 8 months old now and while college savings is certianly in the forefront of my mind I can’t help but thinking I should get started on my retirement savings at the same time. With essentially 60 years before I retire I have some of the most powerful forces in the world on my side (Compound Interest and Time).

Assuming I can get 10% interest on any money I invest I can expect any money I invest right now to grow over 304 times by the time I retire!!! That means if I put just $1,000 away I will have over $304,000 by the time I turn 60 and I will not have to do any work. This is incredible!! Even if I only get 8% return on my money I can still expect my money to grow 101 times!

Now there are other things to consider such as inflation and taxes which can eat away at my retirement nest egg. While there is not much I can do about inflation other than choosing long-term investments that provide superior performance, there are a couple of ways to get around the taxes.

One of the most powerful tools for younger fellas such as myself to stop taxes from taking a chunk out of my retirement is a Roth IRA. Basically a Roth IRA lets me put $4000 a year away for retirement and any money that is made in my account is tax-free and when I withdraw it at age 59.5 or later it is also tax free. The only problem for me is that in order to contribute to a Roth IRA you need earned income (IE I need a job where someone pays me money) and if you make less than $4000 a year you can only contribute up to the amount you made that year.

I was hoping I could sign up for an Adsense account and use the Ad Revenue from this site to help me contribute to a Roth IRA, but after reading the terms and conditions no one under the age of 18 can sign up for an Adsense account, so I guess I’ll have to think of something else. I’ve also been checking the classifieds and there doesn’t seem to be much of a job market for 8 month old children with a strong financial background, so I’ll probably have to wait before I can start contributing to a Roth IRA, which really stinks because if I wait until I am 5 my money will only grow 189 times vs the 304 times it would grow if I started this year. What a difference just a few years makes!! Only 5 years and the amount of money I would have by retirement gets cut in half just by waiting….. let this be a lesson to all of you. Get started as soon as you can, it will really pay off.
Jack