COMMUNICATED –
For many people, the idea of working a 9 to 5 job from the age of 20-60 is just too painful to imagine. When you stop and think about it, the thought of 40 years of endless work demands and long hours combined with tiresome daily commutes does not sound like a life anyone would want. If you dream of better things, it could be time to start planning for early retirement.
By taking proactive steps to invest for your future, you can beat the system and create a retirement fund that will ensure you enjoy life whilst you’re still young. You will get to create the life and lifestyle you want and can abandon society’s ‘work until you drop’ plan. Sound too good to be true? It’s really not. The following are great investment strategies for early retirement.
Make Investing Your Top Priority
If you want to retire early it’s essential that you make investing your top priority. Assess how you’re spending money and find gaps in your finances where you can use capital to:
- Grow A Savings Account: Money you put into a savings account gets to appreciate in value over time and the compounding interest can make a huge difference in the net worth of your portfolio. With compound interest you earn money on your interest or increased value and your money grows at an ever-accelerating rate.
- Buy Penny Stocks: If you are looking for an opportunity with very high possible returns, you should consider penny stocks as they typically cost just $5 per share. By carefully researching which penny stocks to buy, you can find hidden gems that will have remarkable increases in value. It’s best to purchase penny stocks from regulated exchanges instead of the over-the- counter (OTC) market.
Choose the Right Asset Allocation for Your Portfolio
It’s important to pay attention to your asset allocation mix when you are planning to retire early. Since your retirement income will need to cover many more years than it would if you left the workplace at 65, you need to accumulate significant wealth. One of the most effective ways to do this is to invest primarily in stocks during the accumulation phase of your pre-retirement plan.
While many retirees who are working into their sixties might have an asset mix that somewhat balances stocks and bonds, you will likely need a ratio more in line with 90% stocks and the rest bonds and cash. This is necessary because the return on the S&P index has been around 10% over the past 90 years, while 10-year Treasuries only return a little over 2.5%.
Get in The Real Estate Market
As you try to grow your portfolio, it pays to consider the real estate market and the profits that can be made. Real estate has a reasonable learning curve and it’s possible to achieve great returns by utilizing financial leverage and the tax advantages associated with this investment. If you can’t afford to buy new property, you can search for undervalued assets and add your improvements with the goal of reselling at a significantly higher price. Real estate crowd funding is also an option and is ideal for those that are tight on funds. This new approach utilizes crowd funding to raise capital for real estate investments.
