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