Investing under a Roth IRA?

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So, lets say I put in $5,000 into a European Index Fund that in 1 year goes up to $6,000. Does the Roth IRA interest now calculate $5,000 or the $6,000? Does it do the total assets in my Roth IRA? I am trying to explain it the best I can. Well, lets say you made a great return on your stock exchange like 200% yield under your Roth IRA...does that new amount of money get factored into the interest rates of your ROTH towards retirement?

Investing under a Roth IRA?

You dont really earn "interest" as in the sense of a bank paying you interest for the use of your money. Roth IRAs invested in the stock market via things like mutual funds have a rate of return depending on the funds performance.

Yes if you were to invest 5000 which grew to 6000, you now have 6000 in assets. But you are not "garateed" to earn more money because you have 6000 in assest. You basically own the same number of shares that you did at 5000, they are just valued higher now.

With the ups and downs of the stockmarket you could invest 5000 on year, it grow to 6000 the next, and fall to 5500 the next. Roth IRA invested in mutual funds (good aggressive groth/income/international funds) will do great over the long term.

But know that your not making a standard "interest" rate for your money, it is all based on the performance of the fund.

Investing under a Roth IRA?

Yes, that's the whole point.

You will earn compound interest on the money. The only real question is how often the interest will compound (daily, monthly, annually, etc.)

Investing under a Roth IRA?

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