Daily Doses of Finance

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  • What Is an IRA and a Roth IRA? A Simple Guide for Beginners

    By Vibhav Duggirala, 10th Grade Investor

    If you want to start saving for the future, you have probably heard of something called an IRA or a Roth IRA. These accounts are designed to help you save for retirement. Even though retirement seems super far away when you are in high school, learning about these now can give you a big advantage later in life.

    In this article, I will explain what an IRA is, how it works, what makes a Roth IRA different, and which one might be better for young people like us.

    What Is an IRA?

    IRA stands for Individual Retirement Account. It is a special type of savings account that helps you invest money for the long term. The main goal is to grow your money so you can use it when you are older and no longer working.

    There are two main types of IRAs: traditional and Roth. Both let your money grow over time through investments like stocks, ETFs, and mutual funds. What makes them different is how taxes work.

    How a Traditional IRA Works

    When you put money into a traditional IRA, you may be able to deduct that amount from your taxable income. This means you pay less in taxes now. The money inside the IRA grows over time and you do not pay taxes on it until you take it out in retirement.

    This can be helpful for adults who want to lower their taxes today. But when you retire and take the money out, you will have to pay income tax on it then.

    What Is a Roth IRA?

    A Roth IRA works in the opposite way. You put in money that you have already paid taxes on. That money grows over the years and when you retire, you can take it out without paying any taxes at all.

    This is a great option for teens and young adults who are not making a lot of money yet. Since you are probably in a low tax bracket now, it makes sense to pay taxes today and enjoy tax free money later.

    Why Roth IRAs Are Great for Teens

    Roth IRAs are perfect for young investors because time is on your side. If you start investing early, even small amounts can grow into something huge by the time you are older. You do need to have earned income to contribute, like money from a part time job or a business you started.

    Many parents can help their kids open a custodial Roth IRA where the parent manages the account until the child turns 18. You can invest in index funds, ETFs, and more, just like with a normal investment account.

    Conclusion

    Learning about IRAs and Roth IRAs now can help you make smarter choices with your money later. A Roth IRA is a great tool for teens because it gives them a chance to build wealth early and take advantage of tax-free growth. If you have a job and want to start investing, talk to a parent or trusted adult about opening a Roth IRA. Your future self will thank you. Building wealth together!

  • What is an ETF

    Basics of an ETF, made for beginners.

    By: Vibhav Duggirala, published.

    What is an ETF

    An ETF stands for Exchange-Traded Fund. In simple terms, it is a single stock that you can buy that tracks either an entire sector or a group of the best companies, such as the Vanguard S&P 500, which is an ETF that tracks the 500 largest publicly traded companies in the US. So, pretty much you own a small part of a bunch of companies.

    Pros of an ETF

    ETFs are a great choice for beginners because they allow you to invest in many companies at once, which reduces your risk. They are affordable since most have low fees, meaning more of your money stays invested. You can buy and sell ETFs easily through any brokerage account, just like regular stocks. Many ETFs, like ones that follow the S&P 500, have a strong history of long-term growth. They are a simple and smart way to start building wealth without needing to pick individual stocks.

    Cons of an ETF

    Even though ETFs are safer than individual stocks, they can still lose value if the overall market drops. Not all ETFs are well-diversified—some focus on risky sectors like crypto or oil, which can go up and down quickly. There are also so many ETFs available that it can be confusing to choose the right one without doing research. Some ETFs charge higher fees than others, which can reduce your profits over time. It’s important to understand what you’re buying and always check the fund’s performance and costs before investing.

    My Favorite ETF

    My favorite ETF right now is the Global X Robotics & Artificial Intelligence ETF, ticker symbol BOTZ. This has insane potential due to the fact that it is comprised of many technology and AI stocks, which is where most of the wealth will be in the future. You can already see that AI will be a massive part of our lives; for example, Nvidia, the company with the highest market cap, beating out the likes of Apple and Microsoft, shows AI’s dominance in the market right now, and it can only grow in the future.

    So, if you want to get into investing or want a less risky option than individual stocks, ETFs are a great option and could help grow your portfolio to an immense amount. So until next time, keep investing and let’s grow together!

  • Market Dynamics in June 2025: Essential Insights for Investors

    June 2025 Shook the Markets — Here’s What Investors Should Know

    By: Vibhav Duggirala, June 23, 2025, published.

    The first half of 2025 has seen anything but a quiet financial world. Plenty of major headlines have hit—from talk of a possible Federal Reserve pivot to new tariffs, oil market turbulence, and a stunning tech launch by Tesla—that have investors on edge and the markets on the move.

    For novice investors, most especially those in the process of just beginning to assemble their portfolios, these occurrences can seem daunting. But they can just as well serve as teachable moments when you can arrive at the right perspective and using events to learn, adjust, and grow your wealth more intelligently.

    The Fed Might Cut Rates — Sooner Than Expected

    Federal Reserve officials dropped hints on June 21 about possible interest rate cuts later this year. This is huge: for months, the Fed has focused on keeping inflation under control by keeping rates up. But with job growth having slowed and inflation having cooled, that approach might now be changing in favor of a more traditional monetary policy.

    What it means for you: Stocks could increase. Low interest rates generally push investors into the stock market. That might specifically help growth sectors like tech.

    The cost of borrowing drops — Interest rates on loans for purchasing things like automobiles or for incurring future educational expenses may well be less than they are now. smh.com.au

    The yields on savings accounts may fall — The rates on high-yield savings accounts may soon begin to decrease, so this might be an opportune moment to secure returns.

    Tariffs Are Back — And Inflation Might Follow

    In April, the U.S. government rolled out sweeping new 10% tariffs on almost all imports, dubbing them “Liberation Day tariffs.” The thinking behind these tariffs is that they will bring manufacturing back to the United States. But critics warn that the effect could be the opposite, driving prices for everyday goods even higher.

    What it means for you: Inflation might rise again — If firms have to fork over more cash to bring in supplies from outside the country, costs for everything from apparel to electronics to groceries could go up.

    Certain stocks might have a hard time. Businesses that depend on worldwide supply networks are likely to experience declining profits.

    U.S.-based manufacturers stand to gain from reduced foreign competition.

    Is China Weighing a Change in Strategy for Its Currency?

    In an effort to boost the export economy, China has maintained a relatively weak currency in recent years. This prompted experts to question whether it is beneficial for the country to consider allowing its currency to appreciate in value. If so, this would enable Chinese consumers access to foreign goods and strengthen China’s large global standing.

    Why this matters:

    With increased investment inside the country comes opportunities.

    The economy of those countries may benefit as Chinese goods would be expensive due to the new competitive edge they would hold.

    Changes with aligning currency may impact emerging market funds alongside international investments.

    Whether you have invested or are planning to invest, make sure you track your global funds as this trend will accentuate quickly.

    Testing Begins For Digital Euro In Europe

    Launching a pilot program on euro digitalisation, The European Central Bank is working with over 70 entities collaborating on a digital version of euro which functions similarly to cash but exists exclusively online. While it does not classify as a cryptocurrency, it does borrow from some of their technologies.

    Why this matters:

    If proven successful, Spain could be paving other countries ways toward modern economies whereby old methods of exchange will be left behind forever.

    There may also be potential growth opportunities for businesses participating in building such technologies.

    Certain governments around the world might accelerate their efforts towards developing digital currencies.

    Though still in the early stages, digital currencies have the potential to be extremely crucial.

    Tesla Introduces a Self-Driving Taxi Service

    The first self-driving taxi service was launched by Tesla in Austin, Texas. This fully autonomous vehicle service is one of the most innovative steps the company has taken toward transforming transportation. It didn’t take long for investors to respond, with Tesla’s stock price surging nearly 10 percent.

    What We Should Note:

    Such moves from Tesla may impact the development of cars and ride-sharing services.

    New opportunities may arise for companies that specialize in building self-driving technologies.

    Traditional car manufacturers might need to accelerate their innovations to keep up.

    Innovations like this can have a profound impact and since it is exciting for long-term investors, new markets can be created.

    What You Should Do as A New Investor

    Headlines this month reinforce just how rapidly markets can shift. For younger investors, try to avoid emotional reactions; instead stay well-informed and consider the longer horizon.

    Here are three things you should do right now:

    Educate yourself on how certain world events will directly impact your finances. Establish a simple yet diverse investment portfolio that includes long-term options such as index funds. Maintain a calm mindset. Major headlines in the news are absolutely normal—they arise often—and having composed neutrality is key to being a savvy investor.

    Your Spending Decisions.

    The recent developments from late 2023 to early 2025 can teach many lessons with a great focus on how one understands these occurrences realistically impacts your finances moving forward in the future especially considering what is happening in our world today. What Your Role Should Be as a New Investor

    This month’s news illustrates how quickly markets can change. As a young investor, the aim is to remain calm during market shifts and keep an eye on global trends.

    Here are three things that you can implement right now:

    Understand what is happening around the world, and how it will impact your finances.

    Build a basic and diversified portfolio with long-term holdings such as index funds.

    Maintain a balanced attitude. It is perfectly normal for there to be drastic shifts within the news, and remaining composed is crucial in order to be a sharp investor.

    Final Say

    The first half of 2025 taught me numerous lessons. The more equipped you are in understanding these scenarios, the better decisions you can make regarding investing in stocks and other financial commitments. With as little or as much as 5 or 50 or 500 dollars you have, it is all about getting started now.

    Thank you for reading! If this article was useful to you, I would appreciate if you shared it with friends or left a comment below. Lets grow together! See you next time!