It's been said that the sooner you start retirement planning, the better.
And it's true, especially when you are talking about investing for retirement.
Historically, equities have higher rates of return over time, up to 10% or more, meaning that a $10,000 investment left for 40 years could potentially offer a return of $40,000.
But for many young would-be investors, the question isn't whether or not it's a good idea to start investing now, because it clearly is.
The question is how to invest in spite of debt.
The average household credit card debt in America is $15,800.
On top of this, many young individuals and families also have the added debt of college loans, and for many two-adult households it's not unusual to be paying upwards of $1,000 or more a month on debt re-payment.
And with that much money going out each month, investing in the stock market or Forex is the last thing many of these households can think about affording.
But it is possible to invest, even when you are carrying a debt load.
One of the easiest ways to do so is to be smart about what you do with extra money you receive above and beyond your paychecks.
For example, right now many families are anticipating their tax returns for 2010.
This is a perfect example of a time when it's better to put your money to work, rather than splurging on things you want, but don't necessarily need.
But you shouldn't just put your whole tax return down on an outstanding debt, and you shouldn't put it all down on an investment either.
You should look at your situation, and figure out how to make it earn money now, and earn money later too.
For example, say your tax return is going to be $6,500.
You have three outstanding credit card balances, and with your tax return you could nearly pay them off.
But that would leave you no money for investing.
One good option is to pay off the credit card with the highest payment, and use the rest of your tax return for investing.
Why? Because this way, half of that money is working for your retirement, and the other half is now getting you more money each month, thanks to one less credit card payment.
Of course, this isn't a magic solution for all situations.
It's just one example of how you can start investing money for retirement, even with a high debt load.
And it's true, especially when you are talking about investing for retirement.
Historically, equities have higher rates of return over time, up to 10% or more, meaning that a $10,000 investment left for 40 years could potentially offer a return of $40,000.
But for many young would-be investors, the question isn't whether or not it's a good idea to start investing now, because it clearly is.
The question is how to invest in spite of debt.
The average household credit card debt in America is $15,800.
On top of this, many young individuals and families also have the added debt of college loans, and for many two-adult households it's not unusual to be paying upwards of $1,000 or more a month on debt re-payment.
And with that much money going out each month, investing in the stock market or Forex is the last thing many of these households can think about affording.
But it is possible to invest, even when you are carrying a debt load.
One of the easiest ways to do so is to be smart about what you do with extra money you receive above and beyond your paychecks.
For example, right now many families are anticipating their tax returns for 2010.
This is a perfect example of a time when it's better to put your money to work, rather than splurging on things you want, but don't necessarily need.
But you shouldn't just put your whole tax return down on an outstanding debt, and you shouldn't put it all down on an investment either.
You should look at your situation, and figure out how to make it earn money now, and earn money later too.
For example, say your tax return is going to be $6,500.
You have three outstanding credit card balances, and with your tax return you could nearly pay them off.
But that would leave you no money for investing.
One good option is to pay off the credit card with the highest payment, and use the rest of your tax return for investing.
Why? Because this way, half of that money is working for your retirement, and the other half is now getting you more money each month, thanks to one less credit card payment.
Of course, this isn't a magic solution for all situations.
It's just one example of how you can start investing money for retirement, even with a high debt load.
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