Scrolling Headlines:

UMass tuition set to rise 3-4 percent for 2017-2018 school year -

July 18, 2017

PVTA potential cuts affect UMass and five college students -

July 10, 2017

New director of student broadcast media at UMass this fall -

July 10, 2017

Whose American Dream? -

June 24, 2017

Man who threatened to bomb Coolidge Hall taken into ICE custody -

June 24, 2017

Cale Makar drafted by Colorado Avalanche in first round of 2017 NHL Entry Draft -

June 24, 2017

Conservatives: The Trump experiment is over -

June 17, 2017

UMass basketball lands transfer Kieran Hayward from LSU -

May 18, 2017

UMass basketball’s Donte Clark transferring to Coastal Carolina -

May 17, 2017

Report: Keon Clergeot transfers to UMass basketball program -

May 15, 2017

Despite title-game loss, Meg Colleran’s brilliance in circle was an incredible feat -

May 14, 2017

UMass softball loses in heartbreaker in A-10 title game -

May 14, 2017

Navy sinks UMass women’s lacrosse 23-11 in NCAA tournament second round, ending Minutewomen’s season -

May 14, 2017

UMass softball advances to A-10 Championship game -

May 13, 2017

UMass basketball adds Rutgers transfer Jonathan Laurent -

May 13, 2017

UMass women’s lacrosse gets revenge on Colorado, beat Buffs 13-7 in NCAA Tournament First Round -

May 13, 2017

Meg Colleran dominates as UMass softball tops Saint Joseph’s, advances in A-10 tournament -

May 12, 2017

Rain keeps UMass softball from opening tournament play; Minutewomen earn A-10 honors -

May 11, 2017

Former UMass football wide receiver Tajae Sharpe accused of assault in lawsuit -

May 10, 2017

Justice Gorsuch can save the UMass GEO -

May 10, 2017

A little financial forethought

Massachusetts lost 55,000 jobs between 1999 and 2009, according to a recent article in the Boston Globe. The “dot-com” bust, outsourcing and two economic recessions in the last ten years – among other factors – have all contributed to an inhospitable environment for job growth in the Commonwealth. At least we’re in good company. Massachusetts finds itself in the same dither as a dozen other states including Michigan: home of the precarious American auto industry.

I’d love to be able to tell you with certainty that 2010 is going to reverse the downward trend, but it’s not looking good.

That being said, there are things you can do to subsidize your minimum wage job … if you’re willing to take a few risks.

Last March, in addition to handing out 11 resumes, I decided to take a proactive step toward supplementing my income by capitalizing on what was then the nearly dilapidated stock market. With no financial experience whatsoever and a small insurance check from a minor car accident, I stacked a few chips on the poker table. Nine months later, a couple of my investments paid off, specifically Ford. For those of you who monitor the markets, you know the only U.S. car maker to forgo government bailout funds has proved to be as lucrative an investment as it was a crap shoot.

Aside from investing your money with dicey auto manufacturers, here is what you  and every student should do; open a Roth IRA, which stands for Individual Retirement Account, sponsored by the late Senator William Roth (R – Delaware) in the 1990s. Roth IRAs, unlike standard IRAs, grow tax free, and the money invested in them is withdrawn tax free. The money you dispense into the account comes from your pay check, which has already been raided by both the state and federal governments. There are a few key rules to owning a Roth, however.

You can only contribute earned income to the fund. In other words, you have to have an on-the-books job to participate. So if you work just a few hours a week loading the dishwasher in Franklin, have a work study, or lifeguard at a summer camp, you’re in luck! In addition, the maximum annual contribution you can make is $5,000 until you reach your golden oldies. If your finances so much as remotely resemble mine, this shouldn’t be an issue for you.

“I realize it’s tough to scrape up any money to save for retirement when you’re young and still in school… But if you can, you should. I wish I had done this with some money from my summer jobs,” said Chris Farrell, an investment advisor with Northstar Investment Advisors.

The interest that accrues in ordinary savings accounts generally amounts to pennies in the well. But a Roth IRA can generate tangible income. Farrell breaks it down like this: “Assume you fund $5,000 into a Roth IRA while in college for each of the four years. The total contribution is $20,000. Assume that money grows at 7.5 percent a year until age 65. The $20,000 would grow to more than $530,000, and it would all be tax-free. And if the money grew at 8.5 percent, it would be worth over $820,000.”

Unlike a typical savings account, a Roth isn’t linked to a debit card for all of you shopaholics. The money is not entirely off limits. Medical emergencies and first time home purchases are acceptable uses for the fund. So long as you don’t withdraw any profits from the account, there are no penalties. For example; let’s say you deposit $4,000 into the Roth. After a few years it is worth $6,000. Other than the reasons I previously cited, you can withdraw no more than $4,000 – your contribution – or risk a penalty.

Conveniently, you can bridge your checking account and Roth IRA, and have a certain amount transferred into the Roth on a monthly basis. It can be as little $25 or as much as a few hundred bucks.

Remember I asked you if you were willing to take a few risks? Here’s the catch. Roth IRAs typically mirror the stock market. Therefore, when stocks are down, so is your Roth. But when stocks are up, you’re making profit!

I’m an English major who is looking to be a high school teacher. There will be no multi-million dollar contract for me. With every passing day, my dream of being a celebrity surrounded by adoring fans appears slimmer and slimmer. But that doesn’t mean I can’t be rich. The same applies to you. This is my advice. Set up an appointment with a broker. Talking is free, and there are a ton of firms out there. I invest with Edward Jones. I have friends that use Fidelity. Do a little research to find the best company to manage your money. Start saving now, and you’ll be laughing tomorrow.

Shane Cronin is a Collegian columnist. He can be reached at scronin@student.umass.edu.

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