IRAs… A lot of people, especially the ones who are still in their 20s, don’t really know what an IRA is. The word comes from Individual Retirement Account, and as you might have guessed, they are accounts that are used for retirement plans.
Now, if you are here, there’s a big chance you are interested in planning your retirement to a certain extent. There’s even a chance that you are already going through the process of planning it, and you are here because you are interested in IRAs that focus on cryptocurrencies!
Regardless of the situation you are in, getting to know more about retirement plans, individual retirement accounts, cryptocurrencies, and the wonders of investing, is always a good thing. Thus, in this article, we will talk about them all in a very simple manner, and the first thing we have to cover is, of course, individual retirement accounts!
The Core Principles of an IRA
When we talk about retiring, people usually think that the way to achieve a triumphant retirement plan is through saving. Yes, saving is a very healthy exercise, especially since it grants people the opportunity to purchase and achieve several things in life. However, in the long term, saving is not as advantageous, especially when we add a traditional saving account to the formula.
This is because you have the option of going for an IRA instead! Since, as mentioned over Investopedia, individual retirement accounts have an advantage over saving accounts, and that is the fact that they provide a considerable amount of tax-related benefits to its owner, in comparison to saving accounts that are still interest-bound.
Still, I’m not saying that saving accounts are evil! In fact, saving accounts can be extremely beneficial to people, especially when having access to money on a regular basis is essential for achieving your goals, and fulfilling your usual needs.
On the other hand, an individual retirement account will pretty much lock you from your money until you have become old enough to retire, and you will only have access to it through paying a penalty fee.
Thus, opening an IRA is more about commitment. If you are committed to the idea of planning retirement, they are an incredible asset to own. Just make sure you will be able to deal with life and its many challenges without needing the money!
Now… There are many different types of IRAs you can pick, and of course, one involves the use of cryptocurrencies like bitcoin, and bitcoin IRA investments for you to earn a profit through either long term investments and trading. But how does it work?
Cryptocurrencies such as bitcoin are a very foreign concept for a lot of people, and even when I have done a lot of research, at times I have a hard time really understanding the most complex aspects of it. That being said, I have managed to understand its basics, which I believe is enough to understand its value as an investing method.
Thus, we can say that cryptocurrencies are a digital asset that is often referred to as a digital currency which can be used for a wide range of transactions, with its main trait being a decentralized digital currency that provides a considerable margin of animosity.
This is due to the technology that allows its existence, which is known as the blockchain. As the name hints, the blockchain is a literal chain of blocks of information intertwined between one another and multiple users through their computers.
These blocks of information are practically impossible to decipher, and are managed through said users, which is the reason why it provides a very complex level of security, often described as immaculate.
Among the many options of cryptocurrencies available in the market right now, both bitcoin and Ethereum are the most popular ones. Now, a lot of people would argue that the actual value of these cryptocurrencies is its existence as a form of investment.
There are multiple ways to use them for investing purposes and said methods can be benefitted from if you decide to go for an IRA that allows cryptocurrency transactions. As shown over here, the main methods of investing involve both Trading and Investing.
Trading vs Investing
Trading is, in a way, a short-term form of investing. It involves the purchase and selling of assets on a regular basis to ensure profitable results and avoid loss. To trade is to be constantly aware of the market value of different cryptocurrencies to ensure that there’s a profit in your transactions, thus it requires you to constantly invest time and effort in the process.
For retirement plans, this might not be a really feasible solution, unless you want to have diversity in your portfolio, constantly earn and profit, of course considering that you have the time for it.
On the other hand, investing in cryptocurrencies, especially when it comes to Crypto IRAs, is far more relaxed, since investing is a long-term plan that specializes in waiting for an asset to increase its value overtime.
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Considering that cryptocurrencies are expected to rise in value in the next decade, this action is more than viable. And you also have the option of engaging in smaller transactions overtime to see if you generate a profit, while diversifying your portfolio to avoid losses!
Of course, choosing which one is more suitable for you involves a great deal of research. To profit, you will also need training and experience, but that is something you can always earn along the way, in comparison to just having your money resting for decades until you retire!