Double down in down markets – I like to make monthly contributions and double down if there is a month where the stock market is off more than 10%. Let’s say that January through April are decent months marketwise, so I’ll contribute the same amount each month. But if May sees a drop in the Dow more than 10%, I’ll double my monthly contribution, and keep doing that until the market picks up again. Then I’ll go back to my regular monthly contribution that I started out with in January.
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Open an IRA for your kids - Last week I gave out some great gift ideas for the holidays. Here’s one more for the list, because birthdays count, too: open an IRA for your child and put them on the path to financial prosperity. There are some restrictions in making this move. Your child must have some earned income, like from mowing lawns, delivering newspapers, or filling banana split orders down at the Dairy Queen. If your child made $2,000 working last year, and you have the W-2 or other pertinent record to prove it, you can contribute up to the same amount – $2,000 – in an IRA for your child. Charles Schwab (Stock Quote: SCHW) has a decent program that lets you open an IRA account for $100.
They say Honest Abe could split a chunk of wood with one whack of an axe. You can be like Lincoln, too, by chopping some IRA tax dollars away from the IRS and putting them back into your own pocket.
