How to Invest in a Fidelity Roth IRA for Beginners (2022)
Key points from the video:
What is a Roth IRA?
A Roth IRA is an individual retirement account, mostly used to supplement any retirement accounts that you already have such as a 401(k) or other plans. A Fidelity Roth IRA works the exact same as a Roth IRA would with Vanguard, Fidelity, TDAmeritrade, WeBull, or M1 Finance would.
I learned how to invest in a Roth IRA as a beginner in 2022 by learning a lot from other youtube creators and also studying finance in college
If your goal is to become a tax-free millionaire then a Roth IRA is the exact place that you would want to start.
A Roth IRA takes advantage of “tax sheltering” to an extent. The money that you put into a Roth IRA is tax-advantaged in that you contribute after-tax dollars to the portfolio and the gains are allowed to grow tax-free. This means that if you make a million dollars from your investments, you will be able to withdraw all of that million dollars without paying anything to the government once you reach the ripe old age of 59 1/2.
The maximum annual contribution for a Roth IRA is $6,000 for someone who is under the age of 50. After you reach the age of 50, you are allowed to make “catch-up” contributions which amount to $7,000 annually.
I do a calculation in the video to see exactly how effective this strategy would be over the long term, and it is crazy the amount of growth that you can reasonably expect.
I calculated the growth of a portfolio with an annual contribution of $6,000 with an average annual growth rate of 8% without adjusting for inflation. Once 35 years had passed, our investments would be worth over $1,000,000 (one million) in the scenario.
What I found most interesting about this was that the amount of principal that would be contributed only accounted for $210,000 and the rest of the $800,000 that made up the portfolio was all in compounded growth.
Under today’s tax laws, if these gains were not in a Roth IRA then you would have to pay 20% of that $800,000 to the government in taxes because of long term capital gains taxes. This is why having the ability to avoid these taxes is one of the main reasons that people choose to invest in a Roth IRA in the first place.
Later in the video, I talk about my own personal portfolio and the mutual fund/index fund that I invest in.
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Disclaimer: This is not investment advice….(read more)
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i made a minor roth ira on fidelity but i cant log in through the app on my phone, can u help
Excellent in pointing out the fact in how your investment will be seriously affected by taxes depending on which party is in leadership position in Washington when you re taking out your investments.
Great info but slow down, lol. Seems like your trying to beat the "clock"
You broke down the Roth IRA well man. Like 95
Great info for beginners. Nice share. LIKE 79#
Don't even invest with Fidility, go with Vanguard , My Fidelity Rep lied and said I could not move my 500 shares of SHOP stock to another IRA because it was a Rollover IRA , you can do unlimited transfers , the CFA he found sold my 500 shares of SHOP and I missed a gain of $700,000 because the stock went from $90 to $1600/share , and I told them multiple times what this stock would do and multiple times do not sell this stock and they made him a VP
I like how you setup your studio, and thanks for the good explaination sir…
As an investing enthusiast, I often wonder how top level investors are able to become millionaires off investing. I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make decent returns
Good stuff. Great information and message for investors. Keep it up!
Awesome stuff bro!
I just set up a Roth IRA account with Fidelity for my Uncle. Great Video
I recently made the switch from Schwab over to Fidelity as well! Roth IRA's are a no-brainer for people who want to get those tax advantages!
Amazon yeah good pick up.
So much valuable information in this video. The Roth IRA is one of the best investment vehicles out there. Excellent video, Anfernee!
Cool
Okay