Consider that $1,000 invested in Amazon would be worth nearly $220,000 today, growing at an average annual return of 30.88%. Or that $1,000 invested in Berkshire Hathaway in 1970 would be worth nearly $10.2 million today. Invested wisely, even a small amount of money can compound, and like a snowball, grows faster and faster the longer you stay invested.Albert Einstein is said to have remarked that “Compound interest is the eighth wonder of the world.
An IRA is superior to a 401 because it comes with greater investment freedom and if you open a relatively new class of IRA, the self-directed IRA, you can access a range of alternative investments, such as real estate, private equity, private mortgages, oil and gas limited partnerships, horses, intellectual property and precious metals. If you want real flexibility, you need a self-directed IRA because it exposes you to assets with a higher ceiling for growth.
So, a good place to start is by investing in the market through mutual funds or exchange-traded funds . You also want to buy a handful of stocks in quality companies trading at a discount to their value. You want companies that you believe you can hold onto for decades. There are few of these around.
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