I’m constantly coming up with ideas. Much moreso than I suspect is normal. (At any given time I have about half a dozen ideas for new businesses floating around in my head.)
A lot of the times after a few minutes in my mind I’ll reject an idea for one reason or another. Other times I realize that it’s a really good idea and act on it. But today’s idea I’m not so sure about.
I think it’s very important that have a good retirement account. The money you earn is basically time times interest rate, and, while I can shop around for a good interest rate, you just can’t beat 40 years time when it comes to interest earned. ($2,500 today, with no money ever added, earning 10% annual interest, left alone for 40 years, would be a $113,000 retirement fund.)
I also noticed that I had a pretty ‘good’ schedule that I constructed back when I was on my ‘late’ sleep cycle: go to bed late and wake up late. I’m currently not on that sleep cycle, which means I’ll have lots of free time during the days. Mostly joking, I proposed that I should get a job to fill the time during the days.
And then these two random thoughts collided. The obvious result: why not get a ‘light’ part-time job during the days and earmark 100% of the earnings for contribution to an IRA?
Realistically, I doubt I’ll carry through. But I wanted to share the idea, because I really like it.
SO what is your plan for getting 10% interest? I do like the idea of putting money away for retirement starting very young. I wish I had done that.
Index funds. Depending on who you ask, the market averages around 11%. 10% might be an optimistic figure, but even in the long term, many have done much better than that. (I can afford a bit of risk, since I won’t have put much in yet to lose, and I’ll have plenty of time to recover.)
Index funds? Hmm. One of these days I am going to have to find someone who understands all this stuff to manage my money for me. Probably should have done that a long time ago too.
(I am definitely not a good candidate; I like to think I know a little more than Joe Sixpack, but finance isn’t my field, just a sort of passive interest.)
While I’ve certainly learned some stuff at Bentley, a lot of what I know about investment has actually come from the Motley Fool (fool.com). The theory with index funds (e.g., S&P 500, DJIA) is that they’re sort of a natural ‘mutual fund’ except that no one is skimming ‘management fees’ off the top. (Of course the index funds themselves aren’t something you can buy, they’re just, well, indexes, but most of the big names offer a fund built exactly like the indexes.)