Money Musings 💭 plan for this deadline
As a business owner, I don’t have access to a company 401(k) (or company retirement plan) so I make contributions to an IRA (Individual Retirement Account) and my own business solo 401(k).
Regardless of your plan, knowing the deadlines to contribute can help you maximize what you invest.
I like to work backwards each year. To max out my IRA, I take the $6,000 limit and divide by 12. I make a $500 contribution per month.
My solo-401(k) is more complicated because how much I can contribute depends on how much I earn and the contribution limits can get really high. I check in with my accountant periodically about this.
“Fun” fact: as a business owner you can contribute and match yourself!
The deadline to contribute to a company-sponsored plan like a 401(k) is December 31st.
If you contribute to a plan for your own business, your employee contribution deadline is also December 31st (the money you match yourself can come later by the tax deadline!).
If you contribute to an IRA, you have more time. The deadline to contribute is April 15, 2022.
This year you can contribute up to $19,500 in your 401(k) and $6,000 in your IRA. If you are over 50, the numbers go up to $26,000 and $7,000.
If you aren’t close to maxing out your contributions, that’s okay!
As the deadline approaches, think about what you can do. Can you up your contributions by 1% for the rest of the year? Are there changes you can make so you can contribute a little more than you are currently?
MONEY MOVE OF THE WEEK
PURCHASE YOUR FIRST INVESTMENT.
Are you ready to invest? Here’s how to purchase an investment:
The easiest way to purchase an investment is to make a market order. That just means you’ll purchase the investment at the market price at that time.
This is what I now do and I recommend it for everyone, unless you find it fun to try to earn a few extra cents per share.
Only if you’re interested: You can use stop and limit orders to name your price. Specifically, a limit order has you purchase a share at a named price or better and a stop order activates a market order when the investment hits a certain price.
To make it more “fun” 🤪 you can combine them in a stop limit order. The annoying thing is, if your order doesn't execute, you have to do it again the next day.
At the levels most of us are investing, it’s not worth the extra work and time to do these fancy orders for a few cents.
When you purchase an investment you typically have to enter in the number of shares you want to buy. Take the amount you want to invest and divide it by the share price.
If you have $100 to invest and the share price is $35, then you can buy 2 shares. The extra cash waits until next time.
YOU GOTTA SEE THIS
THE EQUAL CREDIT OPPORTUNITY ACT of 1974.
The Equal Credit Opportunity Act of 1974 prohibited discrimination on the basis of race, color, religion, national origin, sex, marital status, or age in credit transactions.
Until the act passed, a woman couldn’t take out a credit card in her own name, without someone like her husband or a father. That’s very recent history. 🤯🤯🤯The act also granted women the ability to take out their own mortgage. And before then, many women seeking their own loans were laughed out of banks..