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About The Clackamas print. (Oregon City, Oregon) 1989-2019 | View Entire Issue (Feb. 24, 2016)
HOW TO PROPERLY SIT ON YOUR MONEY SAVE EARLY SO YOU CAN BATHE IN YOUR BENJAMINS LATER BY DANI CLIFTON M oney — w e all have a relationship with it. Some people covet it and others fear it, but regardless of your personal rapport with the greenbacks, the hard reality is that whatever your future dreams, their fulfillment will likely require funding. Youth does bring a certain invincible optimism, but picture this: if at age 19 yoy began sinking $3,000 annually, or $250 a month, into an investment that gave you a 10 percent return, by age 27 your ven tu re would have earned you $37,738. W hat’ s more, even if you nev er dropped another cent into that fund, instead allowed it to simply ride out the m arket w ithout m aking any tw eaks or changes, by age 65 your initial $24,000 would have grown to $1.5 m illion. 1 This is all w ell and good, but w hat if you sim ply can ’ t afford $250 a m onth to invest? Investm ent adviser Jorge Mar tinez agrees th at in vesting early is key, bu t believes m ore so th at getting into the habit of putting away a portion o f your earnings each m onth is just as im portant. “ Anytim e you get money, whether a paycheck, allowance or gifts, get into the practice of setting 10 percent aside into savings,” M ar tin ez said. “ The habit o f savings John Roselle, 35, is grateful to have had “ th e savings con versation ” early on, w h ich afforded him to begin puttin g 20 percent of his paycheck into a non p rofit 403b (the equivalent o f a 401k) at age 26. “ I had th e p e rsp e ctiv e th a t I w as g o in g to b u y in e a rly and tru s t m y in ve stm e n t w as go in g to do w h a t it n eed ed to do to in su re I had a n ice retirem en t,” said Roselle. than looking for in vestm ent before you see it m akes it a lot easier “ Thehabitof savingsismore crucial to a young adult than looking for investment opportunities.” -Jorge Martinez Retired corporate CEO, Greg W all- w o rk , a gre e s w ith M a rtin e z’ s p e r sp ective and con sid ers th e h a b it o f putting away a portion of one’ s income is param ount. “ Put aside a little b it as you can out o f y o u r p a y c h e c k ,” said W allw o rk. But what is it about investing at a young age, as opposed to w a itin g u ntil the kids are out o f college, th at is o f such im portance? “ B ecause o f com p o un din g,” says certifie d fin a n cia l p la n n e r Rebecca M. Horn, “ w h ere you r m o n ey earns m oney. Com pounding is like a snow ball going down a hill; it starts sm all, bu t keep s p icking up snow , and the more snow it picks up, the more snow it can pick u p .” Okay, so I get $20 from Great A unt M yrtle th is past birthday; w h at is m y best option? Deposit it into the savings account I’ve had since I was five? Horn suggests opening a Roth IRA through a ban k and depositing th at gift as cash. “ Keep adding to it u n til you have the m inim um to m ake the initial Roth p urchase,” said Horn. “ The beauty of a Roth IRA is you can always get back w h at you ’ve contributed, tax free and p enalty free in case life hands you a hiccup ,” Life is unexpected. A little planning early on can reap huge ben efits down the road. Horn had one last piece of advice that she couldn’ t stress enough, “ A lw ays, alw ays, alw ays live belo w your m ean s.” Illustration by Saige Keikkala Clackamas Pr in t FEBRUARY 2 4,2016thedactam asprintc
