Investing in the stock market has become more popular in recent years. A private finance poll conducted by Gallup found that 61% of adults in the U. S. U. S. stocks own stocks, the highest point since 2008.
The lack of financial advice on social media is one of the main contributors to this trend. A survey conducted by market research firm Prolific and commissioned from Forbes Advisor found that 79% of millennials and Gen Z have turned to social media for financial advice.
However, social media tends to concentrate on the most modern and exciting investment news that can also charge you thousands of dollars in long-term fees. Here are 3 undeniable tips to make an investment make more money while also saving on unnecessary fees that are overshadowed.
As a money advisor, I’ve learned that many other people forget about their old office pension plans after leaving their company, unaware that they’re paying additional administrative and maintenance fees to keep their accounts in place.
It’s hard to say, because as an employee, you’ll most often focus on how much you make a private contribution with no additional fees for the investments you choose, as well as the fees for being part of your employer’s plan. .
My husband left his 401(k) with a previous employer and after digging deeper into the situation, I found that he was paying about $100 per quarter to keep the account there without any added benefits. So we transferred it to an individual retirement account. on Fidelity to save money on fees.
If you have a retirement plan like a 401(k) with a former employer, it can be a bit complicated, but moving it into an individual retirement account or your current employer’s plan will potentially result in a lot of dollars in unnecessary costs.
You’ll also get the added benefits of having fewer usernames and passwords so you don’t forget and have more information on how to invest your money now and in the future.
In recent years, there has been an increase in amateur investing apps (such as Acorns, Betterment, and Robinhood) that tout their ability to make an investment simple and fun. But by investing in those gamified apps aimed at generating taxable income, investment, you’re leaving money on the table.
However, I ask other people how much money they invest in their employers’ retirement accounts:
Before you make an investment in an app where you have to pay more taxes on your investments, check to meet your retirement plan’s investment limit before opening a new account.
Instead, you can grow your investment portfolio this way, saving on taxes that you would pay pre-tax in a classic account or after-tax in a Roth account. There are tax differences on those accounts, but the classic and Roth retirement features save you far more in taxes than the same cash in an investment app’s brokerage account.
The annual amount Americans can contribute to their 401(k), 403(b) or 457 plans in 2024 will increase to $23,000, up from $22,500 for 2023.
The annual IRA contribution limit is higher for 2024 at $7,000 if you’re 50 and up to $8,000 if you’re over 50.
Many financial advisors advise you to never stop making an investment or making an investment and paying off your debts at the same time. But if you have credit card debt, you’re wasting cash at a faster rate than the cash from any investment you would have made. do, that is, if you are a new investor focused on the essentials.
The average credit card interest rate is 27. 81%, according to Forbes Advisor’s weekly credit card rate report. This means that hundreds, if thousands, of your cash are absorbed through credit card interest rates and those percentages will still be the first in 2024.
The most productive component of paying off your credit card debt is that once you’ve paid it off, you can invest larger amounts of cash in investments, without worrying as much about your bills. Investments attract more attention and it may seem like you’re missing out on the excitement, but avoiding going into credit card debt before making a cash investment will save you thousands of dollars and years of stress in the long run.
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