Becoming a TAX FREE Millionaire with $10 Per Day: The Roth IRA Explained!

by | Sep 2, 2022 | Roth IRA | 22 comments

Becoming a TAX FREE Millionaire with  Per Day: The Roth IRA Explained!




How YOU can be a MILLIONAIRE with Tax-Free Investing using the famous Roth IRA retirement account in 2020!
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A Roth IRA is just a type of retirement account, it stands for Roth Individual retirement account.

In the Roth IRA, your profits and earnings in the account grow tax FREE. Yes, you heard me. When you withdraw the money, you don’t pay any taxes. There’s a popular saying that says the only 2 unavoidable things in life are Death and Taxes, well at least with the Roth IRA we can get around paying taxes on gains.

If you’re able to invest $10 / DAY into this Roth IRA, you can become a millionaire in 40 years if you average a 8% return. If you contribute the maximum of $6000 a year for the next 40 years, you’ll have a whopping 1.8 MILLION dollars after 40 years.

The current contribution limits are $6000 /year if you’re under the age of 50, or $7000 over the age of 50 which acts as a catch up mechanism.

When you’re young, you’re in a lower tax bracket, for example at the age of 22… I was in the 12% tax bracket, so when you do contribute your after tax dollars into your Roth IRA, you are planning on hopefully being in a higher tax bracket by the time you retire. So it’s ADVANTAGEOUS to you to start young and invest your after-tax dollars NOW while your tax bracket is low. You are making a small sacrifice for potential gains later!

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One of the biggest advantages of having the Roth IRA is that you’re always able to withdraw contributions out, so whatever you put into it – you can take out at any point without penalties or paying taxes on it.

The ultimate time to invest in the Roth IRA is when you’re young to take advantage of COMPOUND interest. I suggest you watch my Compound Interest video (linked below) because it will really inform you how Compound Interest works and the miracle of compound interest within your Roth IRA.

Now as far as what to invest in, in the video I use the example of investing in an S&P500 Index Fund, since that’s a well diversified investment and it’s something you can hold for a long period of time.

There are a few extra things you must know about the Roth IRA:

This is a retirement account, so if you do withdraw before the age of 59.5, you’ll pay a 10% penalty on your earnings, and the earnings are also taxed as ordinary income, so by investing in this you are saving for your FUTURE. Don’t get this mixed up with some of the other investment strategies out there that are trying to get you rich in the next 2 hours, I’ve found those just don’t work that well.

To avoid penalties:
o You can avoid the penalty if the withdrawal is due to certain disability or financial hardships
o You can use some of the money (up to 10k) for a first time home purchase, or qualified education expenses
o Or if you somehow pass away sadly, your beneficiary can make the withdrawal on your behalf without a penalty

See also  Roth IRA: Achieving Tax-Free Millionaire Status by Saving Just $12 a Day

There are income limits to the Roth IRA, if you’re making more than 137k a year, you sadly are not able to contribute to a Roth IRA.

The biggest difference between the Roth and Traditional IRA is the timing of the tax advantages, the Traditional is just the opposite, you’re not taxed on contributions but you’re taxed when you withdraw it.

Hopefully this helps! Leave a comment if you have any questions.

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22 Comments

  1. Jonathan Fortman

    Hmm….$10/day roughly around $300 a month…when I was making $40k+/yr it was very difficult to save that amount of money; just sayin' 🙂

  2. Cobey Fromm

    So do you actively manage your Roth IRA or should you just put money in it and forget about it

  3. Cricket Wireless

    I want to build a investment account with different people as share holders and give them a account to put money in to and buy shares which they must hold for 10, 15, or 20 years before selling. what should I do

  4. Cricket Wireless

    is it a stand alone. no one can grab the money for old bills

  5. abs malone

    Can you do it in the UK?

  6. Dickin Beaver

    Great video! Very informative.

  7. Sports All Day

    What stocks to buy from my Charles Schawb roth IRA PLEASE?!

  8. Danielle Cipriano

    Hey Humphrey, I’m new here 🙂 Love your channel!

    Question: If at any time I make over $137k/yr, can no longer contribute to my ROTH IRA, and so I open a second IRA (a Traditional IRA), would I convert that Trad. IRA to a ROTH IRA right before I withdrawal in retirement or do I need to convert it within a certain time period, ie. within a year of opening the account? Trying to better understand the logistics of the back door IRA. Thanks in advance!

  9. Sean Michel

    In 40 years a million dollars will be chump change

  10. Lakshmi SP

    After the Roth IRA there are additional steps. Like what risk category to choose, allocation of stocks: bonds, based on age and ur general tolerance for risk. I would love for ur opinion, maybe a new video on this

  11. La Chingona

    There are so many companies to open a roth IRA with, how do we pick a reputable company? Any companies you trust? TIA

  12. seek truth

    I am about to turn 25 and am set on opening a Roth IRA but I am not sure how to go about it, also, how much do I need to put in it per month? Or can I just open with a principal amount and leave it there?

  13. seek truth

    I am about to turn 25 and am set on opening a Roth IRA but I am not sure how to go about it, also, how much do I need to put in it per month? Or can I just open with a principal amount and leave it there?

  14. Elizabeth Stagg

    If I open up a Roth IRA do I get a tax deferment or can I write it off on my taxes

  15. Rdela1990

    Thank you so much

  16. Kimberly Chin

    Amazing video! Thank you for sharing this!

  17. Hananiah Pierre-louis

    I opened a Roth IRA 3 weeks ago after watching one of your videos on the topic. I am 38 years old and wish someone thought me these things when I was 25. Thanks for sharing your knowledge with the world.

  18. Anthony Allen

    Talks about not paying taxes, or wanting to pay taxes. Has a keep Tahoe blue sticker. Think you're on the wrong side pal.

  19. isaac arias

    If you have a 401k already, would it be smart to start a Roth account? Which one is better? and would it be a smart decision to start a Roth account even thou I have a 401k. Honestly, I feel like a Roth account would be a better financial choice because it seem it would bring me more capital in the long run instead of a 401k. Hope this make sense lol

  20. Dave Napier

    How many years at 10 $ a day to reach a mill at 59?

  21. Ruben Cabre

    Would you still recommend starting a Roth IRA if I have high interest credit card debt and a buttload of student loans? I took a pause on investing through several brokerages like robinhood and now I'm working to pay off the credit cards. Should I just start investing again but allocating small amounts into a Roth?

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