One way to invest your money for long-term financial goals is with a long-term investment account such as a 401(k), traditional IRA or Roth IRA. When you put money into these accounts, it’s known as making a contribution. These contributions are then divvied up between different mutual funds that you select –or you can ask for the assistance of a financial planner.
A mutual fund is basically like a pool of money that gets invested into different stocks, bonds and securities by a professional management team. As the mutual fund makes a profit, it pays dividends that go to the stakeholders. This is how your retirement money grows.
The nice thing about these accounts is that you can invest in your retirement without having to personally play the stock market or provide the capital necessary for big securities on your own. Of course, you still have to select the mutual funds where your retirement contributions will go. If you’re in doubt, find an affordable financial planner or investment advisor to help you select the right mix of mutual funds for your money.
This is usually the next type of savings you establish in addition to your basic savings account(s). If your employer offers a 401(k), it’s always in your best interest to use it. If you’re in your 30’s and don’t have a 401(k) then consider private options like a traditional IRA or Roth IRA.
Source: Consolidated Credit