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I heard through the grapevine that if you are not going to invest the whole $2,000 a year then you should not even bother. If this is true, then where should I think about investing the money? Maybe increase the amount of my monthly investment into my mutual fund?
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I heard through the grapevine that if you are not going to invest the whole $2,000 a year
then you should not even bother. If this is true, then where should I think about investing
the money? Maybe increase the amount of my monthly investment into my mutual fund?


Get a new grape vine.
Invest what you can.
The fees charged by the custodian and minimun investment may influence what you do at the start but get started.
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Well, if you've only got $20 to invest, then I'd stash this in a money market account til it grows a little bigger. But a lot of IRA accounts have $500 or even lower initial minimum investment -- I'd start now. And you could switch your regular monthly investments to the IRA until you hit $2000.

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I heard through the grapevine that if you are not going to invest the whole $2,000 a year then you should not even bother.

Did the same grapevine say that if you cannot run a 10-mile marathon that you shouldn't even learn to crawl?

Seriously, as long as custodial fees don't consume all of the projected earnings, it makes sense to start as early as one can and keep on investing prudently when one can. If that means, say, $250 at a low-entry mutual fund family, so be it! That would be $250 closer to retirement. If that $250 can grow an annualied 10%/yr for 40 years (assuming no custodial fees or custodial fees paid from outside of the Roth IRA), that $250 would be worth $11,315 at the end of the 40 years. If one invests $250/yr for 40 years, that total would grow to $110,648 at the end of the 40th year.

I don't know your financial situation or your age, but I would certainly bother over the $110,648! 8)
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