When it comes to investing, the focus is usually on returns, or risk. But believe it or not, the small expenses that you incur along the way can actually have a huge impact on your overall net worth. While these expenses can’t be avoided, they can certainly be minimized … and doing so can save you a fortune.
When you begin to save for retirement, the easiest way to get started is to enroll in your employer-sponsored retirement plan (401(k), 403(b), TSP, etc.). The next step (or the first step, for those who don’t have access to an employer-sponsored plan) is generally to open an Individual Retirement Account (IRA). These types of accounts provide great tax advantages, and come in two types: “Roth” and “Traditional.”
Regardless of whether you’re a seasoned investor, or someone just getting started, it often helps to review the most basic fundamental principle that underlies all of investing: compounding. If you truly understand the power of compounding, then you recognize that beyond any other force, it is time that exerts the greatest influence on your investment portfolio.
