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Seventeen percent of those 45 to 59 cannot afford to quit work. For those 60 and above, it’s 13 percent. Perhaps that’s why many seniors still greet people as they enter Walmart.
Let’s take a look at five investment plans that could help you prepare for retirement or at least give you an advantage.
What’s more, if there’s a 401(k) or similar retirement plan at work, don’t pass it up! Many employers offer matching funds. You can stash retirement money in it tax-free until you use it. And, chances are you will pay a lot fewer taxes after retirement than now.
Another wise strategy is looking for a company or corporation with an excellent retirement plan. Any of the US Services do. They're not for everyone, but I retired at 53 and have never needed an alarm clock since.
I will not pretend to understand precisely how cryptocurrencies work or which is the best to invest in daily. I think it’s a good idea to put some money into it so that if it takes off, you could profit greatly.
What if it never does? OK, that might happen too. Chances are it won’t, but I’m not advocating dumping massive amounts of money into it.
I have been buying $200 monthly for a few years, spreading it out over a few I like, But mostly Bitcoin and Ethereum. Now, $2,400 a year is not much money, so even if I lost it all, it would not cripple me financially; however, if cryptocurrencies do take off and reach $80,000 or $100,000 per coin. I will have quite a nest egg.
Various investment vehicles, such as stocks and mutual funds.Photo byFirmbee.comonUnsplash
#2 — Put 5% of Your Income in a Broad Mutual Fund
Your aim here is to invest your money across a highly diverse group of stocks. Yes, your mutual fund's value will decrease if the market goes down. However, this investment strategy uses large corporations, small companies, those that pay dividends, those with rapid growth, and even a few lesser-known companies.
I’m not touting either of these four, though I have used Schwab for years. It doesn’t matter which you use; the point is to find one and start putting money into it. Each of these four has given its investors around a 20% return. That’s excellent compared to the miserable bank rates!
#3 —Put 2–5% of your income in gold, precious metals, or precious metal funds
Gold is another way to invest, though most experts like Warren Buffett insist that gold is not a good investment. In fact, he called it stupid to invest in gold. I am not saying invest in precious metals but in precious metal funds. Besides, investing in physical gold or precious metals could cost more for insurance and storage than you could make.
I am saying to have a small amount in a good fund to spread your money out a little further to hedge against disaster. So, find a good precious metals fund and keep two to five percent of your savings there.
I must say this strategy is one investment tool I have never tried. However, I know some franchises are wildly successful, and if you find one you would like to try, give it a shot.
Ensure the franchise you want to buy into has a good track record. You can check with the Better Business Bureau to get started. You might even be able to include a partner or two and/or get a small business (SBA) loan for start-up capital.
“Someone’s sitting in the shade today because someone planted a tree a long time ago.” — Warren Buffett.
#5 — Invest in Rental Properties or a REIT
Buffett also made a ton of money investing in real estate. He bought run-down houses, fixed them up, and rented them out.
Another caveat of his is, “Like it such that you’d be content to own it in the absence of any market.” What I take from that is when you buy a house, it should have the potential to be your family home. If you can’t sell it or rent it, would you be OK living in it?
So, you might be thinking, “I don’t have the money to go out and buy a house or commercial rental property and renovate it to rent out.” That’s the beauty of Real Estate Investment Trusts (REITs), you can earn a portion of that income produced from owning commercial real estate — without having enough money to buy that commercial real estate. You can learn how to buy and sell REITs from investor.gov.
Summary
So, there you have it. Whether you adopt any of the five smart strategies or choose just one, get started saving and investing now.
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About the author
Stephen Dalton is a native of Old Town, ME, and a retired US Army First Sergeant with a degree in journalism from the University of Maryland. He is a Certified US English Chicago Manual of Style Editor. Top Writer in Travel, Food, Fiction, Transportation, VR, NFL, Design, Creativity, Short Story, and a NewsBreak Community Voice Pro.
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