Stock Investing 101

The contribution limits in 2010 for those of you with Roth ira’s are 5,000 dollars per person. If you are over the age of 50 you can tack on an extra 1,000 dollars to your roth ira as a “catch up”.

You can contribute to your 2010 roth ira from January 2nd 2010 to April 15th 2011. Although this offers you plenty of time to invest in your roth ira it is important that you invest in the ira immediately for a few reasons:

• If you invest now instead of in 12+ months, that is a whole extra year for your money to grow and compound. That means that you should get an extra 10% return just for doing something now instead of later.
• If you are anything like I am you will either forget to make your ira contribution or you will wait until the last minute to do so. You do not want to put yourself in either of these positions.

The best move you can make is to go ahead and contribute as much as you possibly can to your roth ira right now. It is also important to remember that you should be saving more than 5-6 thousand dollars a year if you possibly can.