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Opening A Fidelity Roth IRA Tutorial [2022] - YouTube
Channel: Apple Crider
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Opening a fidelity Roth IRA is
what we're doing today. My name
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is Apple. And today we are
talking about Roth IRAs, what
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they are, why they're important
and how you can actually open
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one, we're going to go step by
step through the process. I'm
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going to show you the screen on
my computer, and we're going to
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go through it. So first of all,
what even is a Roth IRA?
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Well, a lot
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of people get this idea in their
head that a Roth IRA is some
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type of investment, something
that they can invest in, and
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people talk about investing in a
Roth IRA. I think that phrase is
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a little bit misleading. I think
a better phrase would be to
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invest within a Roth IRA.
Because what a Roth IRA is, at
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its most basic, it's an account.
It is a type of account that you
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can put money in and invest that
money into really whatever you'd
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like anything from stocks, to
bonds to index funds, mutual
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funds, real estate gold, there's
just so many many opportunities
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are things you can invest in,
within your Roth IRA, because
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putting money into a Roth IRA,
in itself is pretty much the
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same thing as just putting money
into a bank account. The money's
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just going to sit there, unless
you decide to do something with
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it. And in this case, with a
Roth IRA, where you can decide
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to do is to actually invest it
into whatever you would like. So
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that's all well and good. But
why do Roth IRAs even matter in
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the first place? Well, it really
comes down to is taxes. So in
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the United States, if you make
money, nine times out of 10,
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probably 99 times out of 100,
you're going to end up paying
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some of that money to the
government in the form of taxes.
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If you're making a lot of money,
that tax bracket is probably
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gonna be higher, and you're
paying a larger portion of your
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income to the government. But
the real draw of a Roth IRA is
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that you can make tax free
income you can start building
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wealth without paying any taxes
on this money that you're
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building? So essentially, how
Roth IRA works is you make money
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at a job, or doing something in
some scenario where you pay
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taxes on that income. So if you
go to a job, if you go to work,
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if you work at McDonald's, you
are paying money to your state
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in your federal income tax. All
right. So we've got that
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established. But with a Roth
IRA, you're putting money into
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this account, you've already
paid money and you're working at
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McDonald's, you've paid taxes on
this money already, to the state
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to the federal government. Now,
with your Roth IRA, you're
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putting in this after tax money,
so that when you take this money
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out, so say you invest this
money, you want it back when you
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retire, it's a retirement
account. You want the money back
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when you retire, this money has
grown in value. You have more
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money now than you did before
you pay no taxes on this money,
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if you play by the Roth IRA
rules, and the main Roth IRA
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rule is you wait Until you're 59
and a half to start taking money
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out. So as long as you play by
that rule and a couple of the
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other ones, then you are going
to pay no taxes on this income
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on this wealth that you're
building. So this is really,
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really big guys. And the biggest
thing, the biggest draw to Roth
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IRA, especially for young
people, is you're probably in a
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lower tax bracket right now,
then you will be when you are
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older. So let me repeat that
you're probably in a lower tax
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bracket right now, when you're
young, then you will be when
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you're older. That's for a
couple of reasons. One is you're
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hopefully you're gonna be making
more money. When you're older,
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you're gonna be in a higher tax
bracket, you're making more
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money. That is the first reason
the second reason is because
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taxes are likely to rise going
forward. I mean, we've been
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operating at a deficit forever,
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pretty much so
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the government needs money,
they're gonna need more money as
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time goes on. So taxes are,
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I mean, I'm not gonna say likely
to rise but I mean, there's a
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pretty
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high potential that Taxes are
going to rise. So that is
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another reason why you're gonna
be paying more taxes in the
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future than you would be today.
So because you paid the taxes on
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this income already, when you're
in that lower tax bracket, you
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can invest it, start building
wealth. And then when you want
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that money back and you're in a
higher tax bracket, you are
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paying no taxes already got the
taxes out of the way. So this
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can save you, honestly 10s of
thousands of dollars over the
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course of your life if you play
your cards right with this Roth
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IRA. So now that you know that a
Roth IRA is really just a type
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of retirement account, and the
reason it's important is Bs,
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it'll save you 10s of thousands
of dollars in taxes. Now, let's
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hop over to the computer and
show you guys how you can
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actually open a Roth IRA with
fidelity today. And just a quick
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disclaimer, I'm not giving any
personal financial advice. In
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this video just information for
you regarding how to open a Roth
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IRA investing account and why
that might be a beneficial
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option for you. But again,
consult with your friends Angell
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advisor before you make any
important financial decisions,
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and let's learn a little bit
about what fidelity actually has
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to offer with their Roth IRA,
and a little bit more about what
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Roth IRAs actually are. So here
we go. Like we were saying
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before you make contributions
with money on what you've
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already paid taxes, your money,
then can potentially grow tax
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free with tax free withdrawals
in retirement, provided that
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certain conditions are met. So
that's exactly what we were
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talking about that is the main
draw to a Roth IRA, is that your
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your earnings are tax free if
you play by the rules. And one
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thing I did actually forget to
mention, is that any money that
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you contribute to a Roth IRA, so
let's say you open a Roth IRA,
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you put $1,000 in you come back
next year, it's now worth 1100
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dollars. That first thousand
dollars that you put in, you can
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take out when ever you want and
there's no penalty, no taxing
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nothing. You don't have to wait
till you're 59 and a half to
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mess with that. First thousand
dollars. Now the key is when you
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take out your earnings when you
take out that hundred dollars
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that you accumulated that you
earned in your investments. That
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is when you start to get hit
with fees and penalties if
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you're not playing by the rules
so that that initial money that
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you put in, if something does
happen, if you get hit with an
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emergency, you have to pay
medical bills or something, you
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can totally, totally take out
that initial money, but it's
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definitely not recommended. And
I would definitely recommend
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keeping the money in there and
just let compound interest
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really work. Its magic. So here
we go. tax advantages, like we
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said, I mean, this is all pretty
much stuff we've already
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covered, but account features,
eligibility, there's no age
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limit here, guys. So there are
no excuses. You could be 12
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years old watching this video.
And if you have $100 in your
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bank account, you could put that
into a Roth IRA, start seeing
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compound interest and just like
blow everybody out of the water
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if you start investing in that
early so like there is no age
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limit. There's no excuse here
you don't want to be 18 years or
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older. So that is nothing you
have We're about you must have
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employment compensations, you
must have to prove that you're
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making money somehow. But I
mean, that could be I mean, I
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was working at a family business
pretty much since the age of
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like 13, or 14. So as long as
you can prove that you're
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working somewhere, then you're
fine with that there are other
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requirements, whatever. Okay, so
this is another important thing.
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So as of 2018, you can put
50 $500 into your Roth IRA every
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single year, and I would highly,
highly recommend that you put in
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that total amount, that full
amount, because that is gonna
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allow you to see the most growth
over time. And when you think
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about it, 50 $500 it's really
not that much. It might seem
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like a lot when you're in
college, and you're sort of
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living off of ramen. But in the
grand scheme of things 50 $500
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is not that much money, you
should definitely be able to
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allocate that much each year to
your Roth IRA, especially
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because this is earnings, the
earnings that you're going to be
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gaining are completely tax free.
So definitely try to allocate
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that full 50 $500 To your Roth
IRA every single year, there's
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no minimum to open this account.
So again, no excuses, guys, if
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you are 12 years old and you
have $100, you can open a Roth
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IRA and get started investing
today. So there are no excuses
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for not opening a Roth IRA.
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investment options, like we
said, there are so many things
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you can invest in, from stocks
to bonds to ETFs, to mutual
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funds to Reed's to CDs, some of
these are obviously better
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options than others. But there's
a wide variety, I mean, anything
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you are looking to invest in,
you can definitely do so with a
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Roth IRA and with a fidelity
Roth IRA. I should mention, I'm
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not really sponsored by
fidelity, I just have my Roth
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IRA through them. So I figured I
would talk about what I know the
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most about and not just talk
about some product that I've
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never used before. Okay, so
access to a wide range of
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investments. We already covered
that, and they're pretty good
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customer support. When I first
opened my Roth IRA, I guess it's
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been probably close to two years
now. I really had no idea was
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going on. And I was asking
support all these stupid
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questions, but I got to figure
it out and they were really
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willing to work with me there's
good I just use the text chat
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feature. I think there's I don't
know where it is on the website,
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but you can just chat with
somebody I mean, they have a
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phone number, front and center
on their website. But yeah, just
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chat with anybody ask them all
your stupid questions and they
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will be very willing to help
you. So once you have done that
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all they also have some great
reviews 4.4 stars, nearly 900
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reviews looks pretty good to me.
And then fees, okay, we should
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go over these as well. So
there's no maintenance fees,
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there's no account fees, there's
no kind of fees for like a
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maintaining your account, I
think any account but certainly
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like maintenance fees, it's
probably not worth it. But where
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the fees are going to be is with
trading. So anytime you want to
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buy or sell an investment,
there's going to be a 495 fee to
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get in and to get out. So in
total that's going to be $10 to
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both buy and sell your
investment. So you got to keep
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that in mind. This is Definitely
on the lower end when it comes
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to your discount online brokers
like fidelity, Scottrade
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Vanguard, some of these guys are
going to be about $10 per trade.
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But being in about $5 is
definitely ahead of the bunch.
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Obviously, if you have a robin
hood account, you can invest,
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you can trade for no
commissions, but Robinhood does
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not actually offer any
retirement options yet. So for
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now, if you're looking for a
retirement account, I think that
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LD is definitely the way to go.
Because those commissions are so
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small, and there are no other
fees associated with this. It's
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completely free to open pletely
free to use, there's no minimum
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requirements. So I think it's
really, really nice. So if you
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want to actually open one
marriage, go to open a Roth IRA.
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And we would wait and we would
say, Are you already fidelity
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customer, you'd probably say no,
you put in all your information,
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blah, blah, blah, get started.
And the nowej take you to a
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screen to my Roth IRA and we can
look at what's going on over
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there. Alright, so once you have
a Roth IRA set up, you're going
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to be taken to a screen that
looks something like this. Just
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your main dashboard, your
summary screen for your Roth
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IRA. It's going to give you all
these cool graphs like your
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balance over the years, your
retirement score, not really
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show that's calculated, but
apparently I'm on track for a
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good retirement. That's pretty
reassuring, I guess. And then
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it'll give you some of your
investments over here. But let
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me just take you to my
positions, you can see where my
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Roth IRA is actually allocated
right now. I haven't really
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messed with it in a while. I
haven't contributed that much
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this year in 2018. Yet, this is
all pretty much contributions
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from 2017. But once I sort of
figure out where I want to
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allocate my way, I want to
allocate this 50 $500 this year,
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I will do that. Also, I got 15
free trades from fidelity. I
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mentioned that in one of my past
videos, I'll link that up. But
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so I can really invest in
whatever I want at this point
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without having to worry about
paying any commissions. So we'll
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see what I do with that with
those those to expire at the end
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of 2018. So I'll get those used
up some way somehow. Alright. So
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let's just walk through what
this is really showing really
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quick. So Alright, so with our
first this guy is just how much
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cash I have in here. So this is
just plain cash. It's not
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invested in anything sitting in
here similar to a bank account.
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So I've got about $355, just
sitting in here as liquid cash
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right now. So that's not too
bad. I can buy up a few shares
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of Apple or something with that.
But for now, it's just sitting
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here until I figure out what I
want to do with my contributions
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for the year 2018. Now we've got
some investments in Apple here,
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this is my biggest investment in
my Roth IRA, I've got just over
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14 shares of Apple. And the
reason that it's not 14 even is
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because I've been reinvesting
the dividends. So if you don't
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reinvest your dividends, I would
highly recommend you do because
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this is going to allow you to
see the most power of the
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greatest power of compound
interest taking effect. So I've
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been reinvesting my dividends,
and they have amounted to just
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over a 10th of a share of Apple,
which is pretty nice. If I
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wasn't reinvesting That would be
added back to my 305 number up
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here. But since I do reinvest
those, I'm getting additional
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shares of Apple every time they
pay dividends. Next investment
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here is in Google. So I have one
share of Google. And all these
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guys are way up since I bought
them last year, just because the
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market has been crazy. So these
definitely aren't normal returns
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for a year of investing. So
yeah, don't take that with
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anything. And then here, we just
have a fidelity ETF that just
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tracks the NASDAQ. So that's
it's a pretty basic index fund
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ETF right there. I've got just a
little over seven shares of that
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because again, in reinvesting
the dividends, as I would say is
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a good idea for most people.
Obviously, I'm not giving any
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financial advice here and then
last we got some shares of Wynn
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resorts just a little over four.
And yeah, those are doing fine.
[830]
There was that whole scandal
with Wynn resorts but now we're
[833]
doing all right, we were just up
about about $200 Yeah, just a
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little over $200 a little bit
ago, so not too bad. There. So
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this is just a, this is what
your screen will look like when
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you have a Roth IRA, it's
probably just going to be a
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bunch of this line at first,
this is going to be your dollars
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that you have in here, similar
to a bank account. Now, if you
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want to actually buy, if you
wanna actually invest this money
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we're going to do is head over
to trade, and you will select an
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account. So here's my Roth IRA,
what we're going to do is say we
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want to buy stocks, they want to
buy some apple stock. So we will
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type in the ticker symbol for
Apple, which is a Pl. And we
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will say we want to buy we want
to buy we can only afford one
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right now. So we'll buy one of
these Order Type, we'll just say
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market order, keep it simple.
Time enforce a day, we just mean
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that it'll buy whenever and
preview order. And if I click
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Place Order, then my order would
be placed to buy one share of
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Apple at this price. If that
went through, that would add
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here and then this was a 15.107
it would be subtract from a 355
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number. And that's just How Roth
IRA works. So now that you know
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what a Roth IRA is, why it's
important and how to actually
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start one, after you start learn
how to invest money in one, I
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really would say that opening
one really early on would be a
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great, great idea, because you
can take advantage of so much
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potential compounding, and
maxing out a Roth IRA is always
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always the best option, in my
opinion, if you are, I would say
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under the age of 25, especially
probably even under the age of
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30. Just because you're probably
in a lower tax bracket now, then
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you will be when you're older.
And then when you get older,
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there are different investment
options that are gonna be better
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for you than a Roth IRA because
then you need a higher tax
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bracket. And we're gonna talk
about those in a future video.
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Anyways, guys, my name is Apple
Crider. Thank you very much for
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sticking around. If you made it
all the way till the end, be
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sure to leave a like and
subscribe down below. I really
[950]
would appreciate that and let me
know in the comments what you
[953]
would want to see in a future
video on maybe walking through
[957]
how to open a brokerage account
or some other type of investment
[960]
account. I could definitely go
through that for you guys.
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Anyways, I'll see you guys
tomorrow and until next time
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