I actually know the basics of what it is however what I don’t understand is how you end up with so much money after X amount of years after contributing X amount of money out of pocket. So the maximum yearly contribution now is $6,000 so let’s say you put $500 each month so in order for your account to grow you would have to buy something such as stocks, bonds, mutual funds, ETF etc...with those $500 you put in there monthly? From there hope you have some kind of return from whatever you buy? So do you just keep buying more and more things as the years go by month after month? That’s what confuses me if I just keep buying let’s say a certain mutual fund for 10 years month after month I will basically be paying different prices for it but eventually I should have an average return of 5%-7% as they say? Or does some of that growth in my IRA account itself pay me interest or do the investments I have do? Thank you in advance! Sorry I am clueless.
Submitted December 30, 2020 at 11:08PM by studentlife408 https://ift.tt/3htSNFG
