What's the point of an IRA?

Toggle sidebar Toggle sidebar
L

LordJezo

Banned
May 16, 2001
8,140
1
0
So say you get an IRA and then invest in some stocks.

Stock market crashes, lose money.

Say you get an IRA and invest in some mutual funds.

Stock market goes crappy and you lose money.

Why is it any better then a savings account? Playing stocks are just like playing the lottery.. its a gamble with risk.

Isnt there anway to make real investments and make real money with out having to worry about losing it all? At least in a bank account my money gets a small bit of interest and is guarenteed by the government..
 
J

Jzero

Lifer
Oct 10, 1999
18,834
1
0
The goal of an IRA is that you keep adding money every so often, and you are hedging on compound interest and the fact that regardless of temporary swings in the market, if you start when you are 18, it will likely be higher 40 years later.
 
biostud

biostud

Lifer
Feb 27, 2003
19,927
7,037
136
Originally posted by: LordJezo
So say you get an IRA and then invest in some stocks.

Stock market crashes, lose money.

Say you get an IRA and invest in some mutual funds.

Stock market goes crappy and you lose money.

Why is it any better then a savings account? Playing stocks are just like playing the lottery.. its a gamble with risk.

Isnt there anway to make real investments and make real money with out having to worry about losing it all? At least in a bank account my money gets a small bit of interest and is guarenteed by the government..
Click to expand...

Higher risk == possible Higher benefits

.......Bonds, no risk of loosing money AFAIK. Not much benefit, but better than a bank account.
 
P

PunDogg

Diamond Member
Jan 15, 2002
4,529
1
0
Originally posted by: BigSmooth
Two words: tax shelter.
Click to expand...

that and its something you are keeping for LONG time, so where as just trading stocks one might keep them in for a couple years, this is for many years till retirement

Dogg
 
L

LordJezo

Banned
May 16, 2001
8,140
1
0
But what are you supposed to invest an IRA in?

Individual stocks are crap shoot and you never know what will happen to any company on any day. I've tried out individual stocks and some mutual funds, but overall everything just keeps losing money.

Are there no safe investments?
 
I

isasir

Diamond Member
Aug 8, 2000
8,609
0
0
Originally posted by: LordJezo
But what are you supposed to invest an IRA in?

Individual stocks are crap shoot and you never know what will happen to any company on any day. I've tried out individual stocks and some mutual funds, but overall everything just keeps losing money.

Are there no safe investments?
Click to expand...

Unless you're retiring soon, you're looking at your IRAs way too often.
 
L

LordJezo

Banned
May 16, 2001
8,140
1
0
IRAs cost money too. Places like eTrade and such charge you quaterly fee's just to keep them open!!
 
V

Viper GTS

Lifer
Oct 13, 1999
38,107
433
136
Originally posted by: LordJezo
But what are you supposed to invest an IRA in?

Individual stocks are crap shoot and you never know what will happen to any company on any day. I've tried out individual stocks and some mutual funds, but overall everything just keeps losing money.

Are there no safe investments?
Click to expand...

You're looking in the extreme short term.

Retirement investment is about the extreme long term.

Viper GTS
 
Y

Ynog

Golden Member
Oct 9, 2002
1,782
1
0
Originally posted by: LordJezo
So say you get an IRA and then invest in some stocks.

Stock market crashes, lose money.

Say you get an IRA and invest in some mutual funds.

Stock market goes crappy and you lose money.

Why is it any better then a savings account? Playing stocks are just like playing the lottery.. its a gamble with risk.

Isnt there anway to make real investments and make real money with out having to worry about losing it all? At least in a bank account my money gets a small bit of interest and is guarenteed by the government..
Click to expand...

Depends on how you look at it.

Short term stocks are very risky.
However over the long term stocks are generally give higher returns than any other type of investment.
So if you are not planing on retiring soon you can live with the ups and downs of the market.

Problem with saving account interest is that, the interest you make is less than the rate of inflation. So money in a savings account actually loses its value over time.
 
GasX

GasX

Lifer
Feb 8, 2001
29,033
6
81
Originally posted by: LordJezo
So say you get an IRA and then invest in some stocks.

Stock market crashes, lose money.

Say you get an IRA and invest in some mutual funds.

Stock market goes crappy and you lose money.

Why is it any better then a savings account? Playing stocks are just like playing the lottery.. its a gamble with risk.

Isnt there anway to make real investments and make real money with out having to worry about losing it all? At least in a bank account my money gets a small bit of interest and is guarenteed by the government..
Click to expand...

Stock market goes up - you win

playing stocks is a lot different than the lottery. In the lottery, your expected payout is far less than appropriate for the odds of winning (i.e. you lose even if you win). In the stock market, you can pick stocks or funds with various amounts of risk to match your risk tolerance. Over time, riskier investments are more lucrative if you are properly diversified. The only way you would lose it all is if you invested in a single stock and the company went bust overnight.

If you put your money in the bank, you have zero risk and consequently you have ZERO return - once you factor in inflation and taxes.
 
N

NivekC4

Golden Member
Apr 26, 2000
1,800
0
0
Originally posted by: LordJezo
IRAs cost money too. Places like eTrade and such charge you quaterly fee's just to keep them open!!
Click to expand...

I opened mine through Fidelity, and there was no charge. I'm not sure if it's because I have other accounts with them, but you can investigate!
 
PricklyPete

PricklyPete

Lifer
Sep 17, 2002
14,582
162
106
Originally posted by: LordJezo
But what are you supposed to invest an IRA in?

Individual stocks are crap shoot and you never know what will happen to any company on any day. I've tried out individual stocks and some mutual funds, but overall everything just keeps losing money.

Are there no safe investments?
Click to expand...

Invest your IRA in an index fund and you should be fine if you are in it for the long haul...if you weren't in it for the long haul...I don't know why you would be interested in an IRA.
 
FeathersMcGraw

FeathersMcGraw

Diamond Member
Oct 17, 2001
4,041
1
0
Originally posted by: NivekC4
I opened mine through Fidelity, and there was no charge. I'm not sure if it's because I have other accounts with them, but you can investigate!
Click to expand...

Even no-load funds deduct their expenses from the fund's overall assets; you just don't see it on your statement because you're getting your net results after the management fees have been factored in.

In your fund prospectus, you should see something called a management expense ratio; that's the charge you're (indirectly) paying. Lots of folks advocate buying "indexed" funds over "actively-managed" funds due to their inherently lower expense ratios, which means a greater portion of the funds' assets are available for actual investment, as opposed to paying the salaries of the people who manage/execute the fund.
 
L

LordJezo

Banned
May 16, 2001
8,140
1
0
Looked at the S&P index fund.. $1000 a share! That sure is a lot of money.. and it has lost quite a bit over the past 5 years as well.
 
GasX

GasX

Lifer
Feb 8, 2001
29,033
6
81
Originally posted by: LordJezo
Looked at the S&P index fund.. $1000 a share! That sure is a lot of money.. and it has lost quite a bit over the past 5 years as well.
Click to expand...
is your investment horizon 5 years or until retirement?

btw, you are officially trolling now, or just mentally deficient in an extra chromosome kind of way...
 
D

dolph

Diamond Member
Jan 18, 2001
3,981
0
0
Originally posted by: Mwilding
Originally posted by: LordJezo
Looked at the S&P index fund.. $1000 a share! That sure is a lot of money.. and it has lost quite a bit over the past 5 years as well.
Click to expand...
is your investment horizon 5 years or until retirement?

btw, you are officially trolling now, or just mentally deficient in an extra chromosome kind of way...
Click to expand...

compare the s&p 500 index's past 5 year performance to the past 50 years. or djia. invest in either of those for the next few decades, and you will make money. if you don't, then you needn't worry so much about that because chances are you should be more concerned about fighting over a deer carcass with the other cave dwellers that survived the nuclear war.
 
L

LordJezo

Banned
May 16, 2001
8,140
1
0
Originally posted by: Mwilding
Originally posted by: LordJezo
Looked at the S&P index fund.. $1000 a share! That sure is a lot of money.. and it has lost quite a bit over the past 5 years as well.
Click to expand...
is your investment horizon 5 years or until retirement?

btw, you are officially trolling now, or just mentally deficient in an extra chromosome kind of way...
Click to expand...


Not trolling. Just stupid when it comes to this.
 
T

tnitsuj

Diamond Member
May 22, 2003
5,446
0
76
You put money in...you let it sit there tax deferred or tax free for a bunch of years and in the end you take it out. Not complicated.
 
Queasy

Queasy

Moderator<br>Console Gaming
Aug 24, 2001
31,796
2
0
Originally posted by: tnitsuj
You put money in...you let it sit there tax deferred or tax free for a bunch of years and in the end you take it out. Not complicated.
Click to expand...

And the rate of return in an IRA will be MUCH higher than letting the same money sit in a savings account or bond.
 
You must log in or register to reply here.

TRENDING THREADS

COMPANY
RESOURCES
FOLLOW
Top Bottom