Planting a seed that will help you build your portfolio

 ROTH IRA is not a bad idea...

When you contribute to a Roth IRA, your earnings are tax-free, provided you wait until age 59 1/2 to make withdrawals.

Are you young and working? Maybe you should think about starting a ROTH IRA to help you gain financial  security. We found this interested article in USA Today written by  John Waggoner, a financial columnist for USA Today.  The title of the article is "Investing: Young? Working? Start a Roth IRA. Here's how,"and Waggoner expresses why it is a wise decision for young adults to start a ROTH IRA.

If you are unaware of what an IRA ( Individual Retirement Account) is, a IRA is " a special account that lets you defer or eliminate taxes on your investments. You can have an IRA in nearly any financial institution -- a bank, a brokerage or a mutual fund company, to name some of the most popular IRA custodians."

A traditional IRA allows you to deduct your contribution from your income. The benefit of this is that it reduces your taxes. Your earnings and your contributions are tax-deferred until you make withdrawals. The contrast of using a traditional IRA  is that once you turn 59 and you make your withdrawals from the  IRA ,you will be taxed at your ordinary income tax rate and if you make an early withdrawal, in most cases, you have to pay a 10% penalty on the amount you withdraw, as well as ordinary taxes. With a ROTH IRA you don't deduct your contributions. But your earnings are tax-free if  wait until age 59 to make your withdrawals.

Waggoner explains that the attractive benefits of investing in a ROTH IRA  instead of a traditional IRA is:

* Low tax rates. Federal income taxes are about as low as they will ever be. If you're in your 20s now, you'll probably be paying a higher tax rate when you're 59 1/2. If that's the case, it's better to pay taxes now than when you retire.

* Early withdrawals. You can withdraw your contributions from a Roth at any time without penalty. You can also avoid the 10% early-withdrawal penalty if you're a first-time home buyer, or if you're disabled. Or dead. But let's not think about that.

* Simplicity. When you retire, it's far easier to take tax-free withdrawals than it is to calculate what you'll need after taxes and send off estimated payments to the Internal Revenue Service.

If you are thinking about being a life long real estate investor, the ROTH IRA might be a good idea. When you reach 59 1/2, you can withdraw funds tax-free and use the funds to invest in real estate properties. The funds that you withdraw  from the ROTH IRA can allow you to create a nice portfolio of investment properties. I can guarantee you that the ROI that you will get on your real estate portfolio will yield you a lot better ROI than  you will get from the stock market.