I Wish I Opened These 3 Accounts Sooner

Marc Russell is a former financial advisor and the owner and founder of Better Wallet, where he teaches followers how to use their money and make it work for them, and helps first generation investors build wealth.

Recently, Russell posted a video on the Better Wallet Instagram account, laying out the three types of investing accounts he wishes he’d opened earlier in life, and why. If you happen to be a young prospective investor, keep reading.

Roth IRA

As Russell noted, with a Roth IRA, you are contributing and investing after tax money.  To be clearer — via a Roth option, you contribute the money after taxes are taken out of your paycheck, and that money then grows tax-free. Russell suggested that it’s best to open a Roth account early in your career, when you’re younger and making less money, so that you can get taxed less.

HSA (Health Savings Account)

The reason Russell suggested a Health Savings Account is that they offer three attractive tax advantages:

• A Health Savings Account can be used to pay for qualified medical expenses tax-free.

• You can invest HSA money, and it grows tax-free.

• When you finally withdraw that HSA money that grew tax-free, you do not have to pay taxes on it.

Trust Fund

While it may seem strange for young folks to consider a fund that Russell said “you can control from the grave,” a trust fund is important to start at a youthful age, as it allows you to set aside money for future generations — such as children and grandchildren.

The earlier you start, the more you can invest. Further, a trust allows you to control your hard-earned and hard-save money. Russell explained that were you to die without a trust, your saved money will go into a probate, where a judge will likely decide on where your saved money goes, rather than you.