How does an IRA or a Roth IRA make its money?

Answer 1

Most IRAs are managed by financial firms who make their money either through brokerage or mutual fund fees. They either charge based on transactions that you make on the individual stocks you purchase, or on fees associated with the mutual funds they have you invest in.

You make money through the IRA when the assets appreciate. When you retire, you can take money out of the IRA and defer taxes on the income until then.

Answer 2

An IRA is merely a holding vehicle. Once your money is in an IRA you can invest in anything, given some limits. As long as you place your IRA with a firm that lets you do what you want to do you will be able to invest in most assets. The assets held within your IRA are what make you the money, the IRA is just a shell that holds those assets.

Answer 3

It depends upon what class of investment you pick when you set up your IRA. If you pick Stocks then the stocks in your IRA and their returns is the way you get money --if the market goes up.If you pick Bond IRA's then it is their returns is what gives you money. (there are several other classes of investments you can set up IRA's with)
The company that you set up your IRA with takes your money and places it in these different funds for you and then you watch the market on those particular funds.

Answer 4

This is a great question. For the meeker of heart they put the ira into a firm that gives them a menu of choices for investing, stocks, bonds, funds, ..blah blah blah boring. FOr those with big ovaries, go to a self directed IRA that allows you to purchase mortgage notes, invest in LLC's buy tax certificates and more. Invest in something you understand, not the dow josie pe ratio of internominal nano blah blah blah