While he did not elaborate I’ve been assured by Stanford graduate and co-founder & VP of Marketing for PBwiki, Ramit Sethi who maintains an excellent blog titled ‘I Will Teach You To Be Rich” which you can find at iwillteachyoutoberich.com that 50 is not too late to open an IRA. Sethi is quite well respected in his field and speaks at companies and schools on personal finance and entrepreneurship.

I will continue to dig to find out what someone who starts an Individual Retirement Account plan at or over age 50 can expect. I definitely think that low income people need to get more involved in managing their money and exploring options for growing their money because even they have options. They just don’t know they have options.

Poverty is only a trap because of lack of knowledge about options. Poor people aren’t talking about money except to complain about not having any because they don’t really understand any aspect of money other than how much of it they need to pay their bills and what’s going to happen if they don’t come up with what they need to pay their bills. They go along with the agreement that financial intelligence requires a college degree. In reality you really don’t need to go to college to acquire knowledge in any area. A degree proves you went to a university. It doesn’t prove you know anything. Poor and uneducated people buy into the mentality that knowledge is out of their reach unless they go to school which for one reason or another they cannot/will not do. Knowledge is all around and often free for the taking. You just need to want it. Knowledge is not for some but not for others. Knowledge isn’t something you have a right to because you’re special. Everyone is equally entitled.

The problem is, even in a formal school setting, information is not being delivered on a level that people can truly comprehend. Particularly with regard to the subject of money, in my own efforts to self-educate, what I find is that things aren’t being explained clearly enough for those of us who aren’t versed in the subject of economics to understand well enough to consider ourselves armed with valuable information. There’s an assumption that the subject of money is basic common sense, but when you start talking in economics terminology even college educated folks who didn’t specialize in economics or other finance related subject get headaches.

People aren’t interested in things they can’t understand. The more students grasp concepts the more interested they become in learning. We’re all students of life, and money is a big part of life for all of us. We should all understand how money works not just as far as knowing how much we need to come up with to pay our bills, or how much change we’re owed, or how many hours we’ll have to work to accumulate a certain amount.

We all need to understand from the earliest age possible that one of these days we’re going to have to take care of ourselves and we’re going to need money to do it and that things will come up in our lives, including a point when we’ll be too old to work, but we’ll still be responsible for ourselves financially, and if we don’t have any money we’ll end up living under a bridge somewhere. Because everything is controlled by money and the quality of the life we live from birth to demise is affected in some way by having or lacking money. And it’s in our older ages when we’re most vulnerable because no one is going to take care of us. Even nursing homes cost money; so it’s important to be prepared because everybody gets old, unless they die young.

It seems the earlier you get started with an individual retirement account the greater the benefit come retirement. As this chart from bank of America shows, David, who started his individual retirement account at age 25 had more money than Alison who started her account at age 35 the same time David started his.

From what I’m reading so far the best age to start an IRA is in your 20s. There’s a maximum per year that you’re allowed to contribute to your IRA so you can’t really play catch up if you’re older. Alison couldn’t have increased her contributions to make up for not starting her IRA at age 25 for example. She had the same $4000 yearly limit as David. So if it takes about 10 years for things to start to compound, it might not make that much sense to start an Individual Retirement Account when you’re 50 for example; but then again there are variables involved depending on your investments.

Since I don’t know for a fact that 50 is too late to really benefit from opening an IRA I’ll be asking around for expert opinion. I personally have more than a decade to go before I’m 50 but my better half is going to be 52 this year so we would personally like to know if 50 is too old to start an IRA and if there are better options for someone pretty close to retirement already. I will let you know what I learn.

It’s little wonder the average person doesn’t invest. The whole process is made to seem so complicated you start to get a headache just trying to understand the very basics. I am still in the process of researching IRAs trying to understand the concepts behind the definitions. It’s easy to read the words that tell you what an IRA is as related to money and investing (the acronym IRA stands for many other things), and how many types of IRA plans exist an so on, but if you don’t actually understand what you’re reading it all amounts to nothing. Being able to say that an IRA is an individual retirement account and being able to explain what is an individual retirement account, how having such an account benefits you, and how to manage such an account are two completely different things.

The obvious seems to be that an individual retirement account helps you save for your retirement; but you can save for your retirement any number of ways so why invest in an IRA plan?

On their website leggmason.com, the company Legg Mason, a global asset management firm headquartered in Baltimore Maryland answer the “Why invest in an IRA?” question in their IRA center. Check out their website for their list of benefits that come with IRA investment.

Most of us are more concerned with having money now. The bills don’t wait until we can come up with the money to pay them after all; but there’s something else that doesn’t wait, and that’s time. Without doubt it’s difficult to save money when you’re living hand to mouth, but if you take stock of your spending you might be surprised to discover how much even you, who have no money, manage to spend on things you don’t particularly need every day.

Whenever I go to the store, for example, I pick up a pack of gum for $1.09. Sometimes I pick up 2 packs of gum. Sometimes I go for altoid chewing gum which costs $2.00 at my local publix.  Almost every day in my household we’re spending up to $20 in the grocery store separate and apart from the regular grocery shopping. At the end of the month that’s $600 spent buying things that served no purpose beyond filling us up with sugar, fat and other substances that do nothing to enhance our lives.  And we’re low on the economic totem pole, so if we, being as poor as we are, can still find hundreds to waste every month, then almost anyone can come up with an extra couple hundred dollars at least just by taking the money they spend on things they don’t need every day and saving it.

The hubby and I in the process of researching IRA investments with a goal to open IRA accounts. IRA stands for Individual Retirement Account. You might already know that but we were among those who, while we’ve heard about IRAs, couldn’t answer the question “What does IRA stand for?”

According to fidelity.com, an IRA account is a “tax-advantaged account designed to help you save for retirement.” So far we’ve learned there are 2 types of IRA accounts - Roth and Traditional, and that each comes with different advantages.

There are numerous resources on the web that explain the different types of IRA accounts but they are clearly not aimed at the average person who knows nothing about the subject. It’s interesting because there’s a tendency to criticize those of us who don’t invest or otherwise intelligently manage our money; but so little effort is made to help us understand the many options available. The subject of money and investing is treated like something that’s only for a select group of special people; and the material available on the Internet and in print publications is directed at that select group of special people, usually people who have a professional or otherwise passionate interest in economics or some related field.

Most of the rest of us don’t have the time or inclination to educate ourselves about investing our money. We’re so busy dealing with life, struggling every day to make ends meet. We don’t see how we can save what we don’t have. All we know is that every month we go through the same routine of scraping together to come up with the amount we need to pay the bills, buy some food and so on. Who has money to save in a piggy bank much less to invest in any kind of account? But if you take stock day to day rather than at the end of the money you might be surprised to discover that the answer to that question of who has money to save much less to invest is: you do.

The question is, what is the best way for you to invest that extra money you’ll have once you start making better use of the money you’re spending on junk food, cigarettes, and other unnecessary purchases every day? And that’s what we’re investigating and will be sharing with you over the next several weeks as we explore the options that even poor people have with regard to saving for their future.