We recently heard from Ashley, 25, a documentary filmmaker in Seattle: “How do I get started on an IRA? Or a Roth? I want $340,000 in 30 years!”
We offered to help Ashley launch her retirement account, and she agreed to share her saga, as it unfolds, right here.
In addition to that all-important decision to get started, Ashley also had an initial savings goal: $340,000 in 30 years.
To meet that target, Ashley would need to save $3,000 per year, or $250 per month.
There was drama from day one: Unbeknownst to Ashley, her mom had already opened a Roth IRA for her. The Roth was at a bank in Ashley’s hometown in Oregon. There was about $400 in the account, in a mutual fund.
Ashley had about 12,000 questions—which is the standard amount. Here are three:
Where exactly is the money? Is it invested in the bank or the Roth IRA?
All retirement accounts (401ks, IRAs, 403bs) are like big, empty trucks. You drive your truck to the loading dock (i.e. bank or brokerage house) and say: “I’d like to put in the following mutual funds and other investments.”
You hand over some money; they stack some boxes on your truck. That’s your retirement account.
Mom already put one mutual fund in my account. What is it?
You need the ticker symbol to look at the information.
Any investment (stocks, bonds, mutual funds, etc.) is abbreviated with a ticker symbol, which resembles the call letters of a radio station: JABAX, FFFFX, WNEW-FM (kidding). You need the ticker to learn about each investment product, and decide which you like or don’t.