Now let’s say you have been stashing some money here and there, or you just received an inheritance check, or a settlement check. Before you think about spending that huge amount of money, look into stretching that money even farther for you.
If you have about $20,000 you want to look into the money market. Put about $5,000 in the money market and let it rack of the 4% interest rate over the years and do not even think about that money until you are good and ready to.
From there you want to put some of that money into a Roth IRA. What people do not understand about IRAs is the fact that if you put a certain amount of money in the IRA when you are younger and you do not touch that money until you turn 60, you are going to be incredibly wealthy. This is not to say you should not try to get wealthy quicker, but hedging your bets this way is a great idea.
Try putting about $10,000 into an IRA and just watch your money grow and grow! Make sure that you are just spreading your money around from place to place; this will essentially maximize your profits. If you are looking to invest for your retirement then you are certainly looking at a very fruitful retirement if you invest correctly. $20,000 is a lot of money and it should not be toyed with, so do your homework before you start randomly throwing money around. Sit down with a broker or an accountant and see what they would recommend and see what works for their clients.