Growing your retirement fund doesn't have to be a scary proposition. » Subscribe to CNBC Make It.: How many of us have heard the advice that we need to invest in the stock market?" self-made millionaire and personal finance guru Ramit Sethi tells CNBC Make It. "The common way we think about investing is sitting in front of four [computer] monitors, watching all these words fly by — 'P/E ratios, asset allocation' — and, then we make some investment. "That's not how you invest." Instead, Sethi, who wrote the book "I Will Teach You to be Rich" and founded GrowthLab.com, a website with advice for entrepreneurs, advises looking into something called a target-date fund for retirement investing. "What you need to do is start off in a really simple way, and all you need to know is the date that you are going to retire," he says. This is how Sethi describes the process of starting a target-date fund: "The computer knows how old you are; it knows roughly when you're going to retire — let's say 65 [years old] — and then it creates a nice portfolio for you." Also known as life-cycle funds, a target-date fund is a plan offered by investment companies that involves spreading money around various assets with an ultimate goal of raising enough money for retirement by the specific date that the investor chooses. You can think of the fund as "a pie chart," Sethi says, with some of your invested money going into stocks and equities, some going to fixed income investments like bonds and some remaining in cash. "I love these funds for a few reasons," Sethi continues. "No. 1, they are simple. You don't need to pick stocks." In other words, you don't need to have a strong understanding of the stock market to invest. The only thing you need to worry about, Sethi says, is how to get as much money into the fund as possible each month. Do the math to determine how much money you can afford to put away and then follow through by investing "as much money as possible, every month, consistently, automatically and that fund is just going to grow and grow," he says. Sethi also loves target-date funds because they are "low cost," he says. "These funds are not gouging you with 2 percent [investment] fees. Most of them charge less than 0.2 percent, so it's extremely affordable. It's a great option for beginning investors." While the simplicity of target-rate funds makes them an attractive option for retirement saving, some experts note that one drawback for investors with those funds is the lack of customization they offer. Some investors simply would prefer to have more control over choosing the specific assets in which they're investing. Also, the fees vary from fund to fund, so it's important to do your research and make sure you aren't giving away more of your savings than is necessary. For what it's worth, the bulk of Sethi's own money is currently invested in target-date and index funds, he says. "It's a great investment, a great way to get started" saving for retirement, he tells CNBC Make It. About CNBC Make It.: CNBC Make It. is a new section of CNBC dedicated to making you smarter about managing your business, career, and money. Connect with CNBC Make It. Online Get the latest updates: Find CNBC Make It. on Facebook: Find CNBC Make It. on Twitter: Find CNBC Make It. on Instagram: Find CNBC Make It. on LinkedIn: #CNBC #CNBCMakeIt Self-made millionaire Ramit Sethi shares his No. 1 piece of advice to invest for retirement | CNBC Make It....(read more)
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Ramit Sethi, a personal finance expert and bestselling author, has provided a refreshing approach to saving for retirement that emphasizes simplicity and effectiveness. In a world filled with complex investment strategies and retirement calculators, Sethi offers a straightforward solution that resonates with people from all walks of life. retirement planning can be a daunting task that often overwhelms individuals. The process of selecting the right investment options and navigating through various retirement accounts can seem confusing and time-consuming. Ramit Sethi simplifies this process by focusing on what he calls the "set it and forget it" strategy. Sethi's approach is simple but powerful. He suggests automating your retirement savings by setting up regular contributions to a retirement account, such as a 401(k) or an IRA. By doing this, individuals can save consistently and take advantage of compounding interest, which can significantly increase their savings over time. The key here is not to get caught up in analyzing the constantly changing market or trying to time the perfect moment to invest. Sethi advises against trying to beat the market and instead encourages individuals to focus on consistent contributions to their retirement accounts. By automating this process, individuals remove the emotional element from their investing decisions and can sit back and watch their retirement savings grow with little effort. Sethi also emphasizes the importance of increasing contributions as income increases. As individuals progress in their careers and earn more money, it is crucial to allocate a percentage of this additional income to retirement savings. This ensures that individuals are taking full advantage of their earning potential and maximizing their savings for the future. Another unique aspect of Sethi's approach is his focus on personal finance psychology. He acknowledges that saving for retirement can be challenging for many people due to various psychological barriers. To combat this, Sethi encourages individuals to align their retirement savings with their overall financial goals and priorities. Ramit Sethi believes that saving for retirement should not be a mundane, overwhelming task. Instead, it should be a seamless part of an overall financial plan. By automating contributions and increasing savings as income grows, anyone can ensure that their retirement savings are on track without having to constantly monitor the market. Sethi's approach of simplicity and automation has resonated with a wide audience, especially among younger generations. He has successfully empowered individuals to take control of their financial future by providing them with practical strategies that are easy to implement. In conclusion, Ramit Sethi's focus on the easiest way to save for retirement has revolutionized the way people approach this critical aspect of personal finance. By simplifying the process and utilizing automation, individuals can ensure consistent savings and take advantage of the power of compound interest. Sethi's approach empowers individuals to overcome psychological barriers and align their retirement savings with their overall financial goals. With his guidance, anyone can effortlessly save for retirement and secure a comfortable future. https://inflationprotection.org/the-simplest-method-to-start-saving-for-retirement-as-suggested-by-ramit-sethi/?feed_id=127128&_unique_id=64d950306e34f #Inflation #Retirement #GoldIRA #Wealth #Investing #bestwaytosaveforretirement #businesssuccess #careermanagement #CareerTips #CNBC #CNBCMakeit #Entrepreneurs #financetips #howmuchtosaveforretirement #HowToMakeIt #howtosaveforretirement #howtosavemoneyforretirement #lifehacks #MakeIt #ManagingBusiness #moneymanagement #personalfinance #ramitsethi #ramitsethimoney #ramitsethimoneymanagement #Retirement #savings #smallbusinesses #StartingASmallBusiness #WorkHacks #VanguardIRA #bestwaytosaveforretirement #businesssuccess #careermanagement #CareerTips #CNBC #CNBCMakeit #Entrepreneurs #financetips #howmuchtosaveforretirement #HowToMakeIt #howtosaveforretirement #howtosavemoneyforretirement #lifehacks #MakeIt #ManagingBusiness #moneymanagement #personalfinance #ramitsethi #ramitsethimoney #ramitsethimoneymanagement #Retirement #savings #smallbusinesses #StartingASmallBusiness #WorkHacks
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