How To Fund Your Roth… Painlessly

Separate & Automate Your Savings. A How-To Step By Step.

Do you want to start saving money? Then take yourself out of the equation. Make it an automatic thing every month that you don’t even think about. The absolute best way for you to start saving money is by separating and automating your savings. Separate, meaning you put your savings in a place that is hard to get to so you are not tempted to touch it! And automate, meaning you set up the technology available to you to work for you to transfer and invest money without a second thought!

Follow The Following

What you will find in the following post is a classic wealth-building strategy. Step by step, little by little separating and automating your savings will help you to start investing your money at every paycheck. You don’t have to think, you don’t have to act, and you don’t even have to have the time from here on out! All you need is to do is follow these steps and you will start saving a portion of your paycheck every paycheck!

  1. Go to Vanguard.com
  2. Log in
  3. Top menu bar hover over “My Account”
  4. Go to “Account Maintenance”
  5. Go to “Automatic Investment”
  6. Choose the desired fund you want to invest in.
  7. Choose the dates, amount and frequency you want.
  8. I recommend every paycheck place enough in your Roth to max it out yearly!
  9. Not sure what to place in your Roth? See THIS POST where I detail a great strategy.

Gather Little By Little

He who gathers money little by little makes it grow. The trick is to learn the gathering technique. Here is the gist, as soon as that money hits your account, a portion of it should go directly to paying you first. Put it in your Roth! Start with something small, you can do without $211.53 per paycheck. The following is how I came up with that number and why you too should put $211.53 per pay period to your Roth IRA.

$211.53 is a Great Starting Point

Let’s say you’re paid every two weeks, which means you receive 26 paychecks in a year. $5,500 is the max you can place in a Roth yearly, and that number divided by 26 pay periods equals $211.53 per pay cycle. If you are maxing out a spouse’s account, which you can and should do, then repeat steps 1-8 for them!

That was painless. Good on you for taking action! Keep grinding. First time to the blog? Check out my Welcome Page.

separating and automating your savings. Separate, meaning you put your savings in a place that is hard to get to so you are not tempted to touch it! And automate, meaning you set up the technology available to you to work for you to transfer and invest money without a second thought!
Somethings in life are meant to be separated, like you and the money you want to save. Other things are, well, inseparable.

How To Set Up A Roth IRA: Step By Step

You Still Don’t Have A Roth?!?!

I promised I would show you how to set up a Roth IRA in my Quick & Dirty post, but first I have one request of you. Before you read any more of this, please, please, please promise to YOURSELF you will take the steps outlined below to set up this account in the next 48 hrs. Years later when you have retired, you can send me a thank you note (check is optional). Also, this is foolproof; I had to go through it myself.

The Best Multiplied Four Times Over!!!

After doing what I outline below for you, you can say that you own one of the best retirement accounts available (the Roth IRA) in one of the best no-load mutual fund indices available (The Vanguard Total Stock Market Index Fund: VTSMX) at one of the best, if not the best, mutual fund companies in the world (Vanguard) for one of the absolute best prices available to investors (a dirt cheap expense ratio)!!! Remember my one request of you, please do this now for yourself (don’t wait until five years from now). In an effort to keep this extremely high yield, I am outlining the steps in this post and my following post will have the reasons why.

Roth IRA Set Up. Vanguard. Step by Step.
The way is made my walking. One step at a time!

Your Step by Step Guide To Setting Up Your Roth IRA:

  1. Go to Vanguard.com
  2. Click “Open An Account”
  3. Click “Open A New Account”
  4. Click “Transfer From A Financial Institution” & “Continue.”
  5. Now set up your account with Vanguard. This will take a couple steps and you will need to fund your account at this time as well as determine the account type: choose the Roth IRA. The money you transfer will be placed in a money market account initially. This takes a couple of days to process. Next is where the magic happens!
  6. Once your account is opened & funded, you are ready to Roth, I mean ready to Rock…
  7. Now, on your new account homepage click the Menu icon at the top left.
  8. Click “My Accounts”
  9. Click “Buy & Sell”
  10. Click “Buy Vanguard Funds”
  11. Click “Add Another Vanguard Mutual Fund”
  12. In the dialogue box enter “VTSMX” and click “Continue.” See my second post as to why I chose this one for myself.
  13. Fund your new Roth by entering in your amount in the dialogue box and clicking “Continue.”

Now Go Read!!!

There really is no way around this. Read, read, read and read some more! You have to read about these topics now. You can’t just trust me on this one, unfortunately. I mean, I guess you can, but if you are like me you need the answers yourself or months later you are likely to think that the grass is greener. Without the knowledge of these topics, you are never going to know what is good or bad in terms of investments and that WILL set you up to fail.
You need to start learning now. Keep your eyes on the look out, my post “What Is A Roth IRA” is coming out soon. In that post I will outline why I set you up the way I did and why I set up my own Roth IRA the same way!

Have You Started Yet?

Starting early in investing is a surefire way to developing passive income (i.e. money that makes you money while you do nothing). Passive income coupled with compound interest is an absolute true recipe for success in your financial journey, but it takes years, so start early.

Albert Einstein considered compound interest the 8th wonder of the world. He said of it, “He who understands it, earns it … he who doesn’t … pays it.”