At the beginning of the month, we started contributing to Roth IRAs. We were both so excited to be getting our retirement savings started. Now about a month later our accounts are already down $1.60. No, that’s not a lot, but when you only have $100 they don’t have far to fall.
My point isn’t to whine about the $1.60. I knew going into this that the stock market is volatile, and that we’d see some downturns — especially right now. The point isn’t what’s in my account today but what will be in my account in 40 years. It’s just a strange realization as a first time investor.
I’m used to putting money away in a savings account. The interest isn’t much, only 2.4% right now. But at least when I put $50 in my savings account, I know that $50 will be there next month. My savings account is about security, not income, so it doesn’t bother me that it will only earn a few cents.
Now that we’re investing in the stock market, it’s difficult to realize that some of the money I put in is already gone. It just doesn’t seem right after years of saving for security. It’s discouraging to know that my money could be growing in a savings account — at the very least staying put — but in my retirement account it’s being slowly whittled away.
It’s also tough to know that I won’t see that money again for 40 years. I like knowing that our emergency savings is there if we need it. The same isn’t true for our retirement accounts. We can’t pay bills with that money if we get into trouble. Investing for retirement doesn’t feel like saving — it feels like paying another bill.
Saving is fun for me because I love to watch our money grow. The more money that accumulates in our account, the more secure I feel. I can’t say the same for our retirement accounts at this point. Right now investing is anything but secure. Not only are we losing some of the money, but we can’t touch it for 40 years.
I’m sure I’ll get used to the difference as we continue to contribute. I also know that this is nothing compared to people who have seen their investment accounts cut in half in the past 6 months. I guess I’m just really beginning to understand the investment process in a way that I didn’t understand it before.
How do you keep your spirits up as the stock market goes down? Do you avoid looking at your accounts? Maybe that would be best for now.