You know the story of the tortoise and the hare, right?
Its like that in investing, too.
Slow and steady wins the race.
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Cryptocurrencies and NFTs were the fast bunny rabbit.
Thats all they did.
Theyre the tortoises, and theyre rich.
The thing is, that means you might be rich too.
No Interest Til Almost 2027?
Its also the most realistic way to become a millionaire.
Feed your retirement fund.
Nearly that many Americans 346,800 have become millionaires through their IRAs, individual retirement accounts.
And thats just with Fidelity Investments, the nations largest provider of workplace retirement plans.
Those numbers come fromFidelitys quarterly retirement analysis.
Many never earned six-figure salaries.
They also dont cash out their retirement savings when they change jobs.
Its common for employers to offer a match.
Whatever you contribute, theyll throw in the same amount, up to a set percentage of your paycheck.
How much will they kick in?
Otherwise, youre passing up free money.
you could do this pre- or post-tax.
Thats up slightly from the 2021 limit of $19,500.
Your 401(k) contributions get invested in stocks and bonds.
Then, thanks to the sweet magic ofcompound interest, your money steadily grows over time.
Not to mention the self-employed.
If you dont have a 401(k) plan, what should you do?
Open an individual retirement account, or IRA, pronto.
Unlike a 401(k), an IRA is not affiliated with your employer.
Its a retirement savings and investment account that you open on your own, all by yourself.
With atraditional IRA, you put your money into the account before taxes are taken out.
That money grows tax-deferred until retirement.
You pay taxes on it when you withdraw the money at retirement age.
If you withdraw money before you turn 59 12, you pay a 10% penalty.
The longer your investments have to grow and compound, the more money youll have when you retire.
And youve got to consistently feed that thing.
Dont skimp on it.
Dont cash out your retirement savings when you switch jobs.
Dont submit to the temptation!
Thats what those 825,000 Americans who became 401(k) and IRA millionaires did.
They took the long view.
Remember the tortoise and the hare?
Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.
He is a tortoise.
