Issue link: https://www.massageandbodyworkdigital.com/i/969285
are taxed later when you withdraw the money. So, what is a retirement account? Is it just a bank account? Nope! A retirement account typically contains a mixture of stocks and bonds in the form of mutual funds. But what exactly are stocks and bonds? A stock is simply a share in the ownership of a company. It's a little bitty piece of the company. Simple enough, right? A bond is a little piece of debt issued by a company. Both are ways to invest in companies in the hopes that those companies do well over time, therefore increasing the value of your stocks and bonds. The problem with stocks and bonds is that they are risky. You can typically get higher returns than you would in a bank account, but you can also lose a lot of money if the company tanks. It's like putting all your eggs in one basket and then tossing that basket to the first cook you see. You might get an omelet out of it. Or you might get a very surprised cook and a lot of dropped eggs. This is why mutual funds exist. A mutual fund is a collection of stocks and/or bonds that are all put together into one fund that spreads out the risk. Mutual funds are managed by professionals who aim to generate a good return on the fund. This makes it easier and less risky for average people to invest their money. Instead of investing in single-company stocks that can be very high risk, you are investing in hundreds of companies at once—so the risk is spread out. While bank accounts typically return less than 1 percent, mutual funds can return anywhere from A B M P m e m b e r s e a r n F R E E C E a t w w w. a b m p . c o m / c e b y r e a d i n g M a s s a g e & B o d y w o r k m a g a z i n e 87