So, growing up in extreme poverty, I grew up realizing very young that my parents knew nothing about finances. They went bankrupt 3 times by the time I was 8 years old. I know what starvation feels like. I know what it feels like to live in a garage for part of my childhood. To live in the ghetto. To never have been in a school more than 2 years because we kept not having housing security. So, by the time I was 11, I took finances somewhat into my own hands, little by little. I worked babysitting since I was 8 years old, and I also earned some small coins from doing tasks and chores for people. I got my own bank account, my own savings set up, because I was a strong student, with a bank that paid for every A I earned a small donation into the savings account. My mother influenced some of my saving/spending/investing though, and I learned the hard way her influence was bad, for the most part. She did help me understand budgets, but I made a way better one than she had tried to show me. I didn't want to be stuck my whole life.
Sadly, I remained stuck into my 30s. Because I grew up with total financial ignorance, and had to try to learn what not to do from the people around me. That helped me get to where my stability was better than my parents, and I even helped them be able to put aside enough money to retire, but in reality, I am still living under the poverty level to this day. Learning some of what not to do made me frugal, a bit minimalist, and even someone with a strong work ethic. I became a saver, and was willing to 'do without' to get the bigger things I needed to survive, but over time was able to have more quality of life.
But the ignorance about finances has hurt me deeply in my life. Understanding things not to do kept me from having debt, and gave me a good credit score, without ever getting even a month of interest charged against me in my whole life. But it didn't tell me WHAT TO DO.
I found out in my 30s that I could have, at any point, even as a teenager, opened a Roth IRA. An investment account where the money you put in is already taxed, so someday when you take it out, it will not be taxed, including any growth it accumulated over the years from investments. All money inside it, no matter how big it grows, is not taxed later on when used in retirement.
There is a limit to how much you can contribute in a year, and I have never earned enough in my life to have the cap to spare, but I could have opened one and invested and had something toward retirement. Instead, I listened to my mother and put my saved up money when I was a teen into a single mutual fund, which tanked, and by the time I was moving out I had lost HALF of all my savings. She didn't know anything about diversification, or how to actually grow money. I took my money out of the mutual fund and then was scared of the stock market for years, because I didn't understand how or why that had happened, and I was poor, and losing thousands of dollars felt like a massive punch in the stomach for young, struggling me.
No one ever taught me about finances in school. I had one class on finances in college, and it basically was about stuff I was already doing right. Not having debt. Having the ability to save. The self discipline to pay a credit card at the end of each month. The ability to make a flawless budget. To have financial hopes someday, and to know how much I would have to save to have those goals.
But not about how to grow money. Not about investments and how to get to those goals sooner/or raise the odds of getting to them. No one ever told me I could have a retirement account. Ever.
I worked whatever jobs I could, and none of them were upper class or the kind that would give someone a 401k or anything of that nature. I was excited if I could just get healthcare coverage at a job. No one ever told me that ANYONE can open a Roth IRA. That no matter how dirt poor, even if all I could afford to invest in a year was 50 dollars, that it was still something, and would still grow. That 50 bucks could gain and become 62 bucks in a year, just sitting there, invested into stable index funds and ETFs with a long history of stability. I didn't know until my 30s. And so, my retirement fund is lackluster and rather small.
But at least I have one. According to a study put out by the IRS, only 30% of Americans have a Roth IRA. So, if you read this, and you don't have one, go open one. Most of the investment companies have promotions for opening an account with them for the first time, so just go on your web browser, type in the name of a company you think you could trust and then the word 'promotions' after their company name. For instance, if you typed in Fidelity Investments, which is who I use, you would type promotion after that and find they have a promo that if you invest 50 bucks, in the next 25 days they will add 100 bucks into the account, that you need to leave in there, but still, it is there to invest and help you grow your retirement money.
So, go do it. Because even if you are 16 with your first job, you can open a Roth IRA and have non taxed money to use when you are old and need to retire. Even if you are 50 and never knew you could have a retirement account, you could at least leave it in there growing for 15 to 20 years and have something of some kind.
Even if you can only afford to invest 10 dollars a year. At least it can grow and you would have something, even if just 15k to use as you started into retirement. Anything is better than nothing.
It is true you can lose money in the stock market, but that is why you just put your Roth IRA investments into nice safe low growth, but steady growth index funds and ETFS. Do NOT just buy a bunch of stocks randomly. Just web search popular index funds and ETFs and research from there. The funds over time will trend up, and not quickly, and not get you rich, but they will grow, and so you will have something when you go to retire.
A few days after you pick your index funds/ETFs, make sure you go into your account and set your gains to reinvest themselves back into the security they came from, whichever index fund or ETF you earned from. That money is for later anyway. It isn't like you are going to use it now, so it will give your money an extra chance to grow. Maybe you can't afford to put any money in that year, but your gains will still compound your growth even if you can't put a single dollar in yourself that year.
If you can afford to max out your contributions for the year into your Roth IRA, do it. Remember, any growth on that money is NOT TAXED later on in life after you retire. You can with draw from it after age 59. Or, if you are getting your very first home, you are allowed to withdraw up to 10k from it untaxed early. But really, you should just let that all grow in there. Unless you are putting money into the account, just pretend it doesn't exist. Let it get bigger and bigger so when you retire you have something.
Just make sure you open a Roth IRA now, while you can. Today, if you don't have one. Don't be left empty handed when you retired, praying that social security still exists when you retire. It might not be enough to make you rich, but it can be enough to give you even 100 dollars a month more than you would have had for the rest of your life in your aging years, the years when your body is slower and can't do all the things anymore. Take some of the stress about aging and finances and turn it into something that can help you. Can help anyone, financially. Open a Roth IRA.
