4/19/14

Investing for Wealth Financially Secure your Nest Egg

investing for retirement

Understanding Investments


  As you age it becomes quickly apparent that there is no one to count on for financial support but yourself. Your age, health, and how quickly you are approaching retirement all influence the investment choices you make. Investing early and using proper channels to see a return on your investment will ensure you live a comfortable and happy retirement. Unfortunately very few people will follow effective investing techniques and end up having to stay employed well into their golden years. Instead of spending the best years of your life relaxing, if you don’t save you will have to keep working. Even if you aren’t planning on retiring soon, having a solid investment portfolio will reduce your stress and ensure you’re financially sound in case of any situation. Here are the best options you have to earn a return on your financial contributions.

IRA

  Having an IRA, or Individual Retirement Account, is one of the great investment techniques you can practice to start building your nest egg and arranging for the time you won’t be consistently earning. IRAs are great because the money you contribute to them is not taxed by the government. That means any income you earn from your investment – interest, dividends, capital gains – can grow freely without having to pay tax on it. Depending on your IRA you can also avoid paying taxes on the money you contribute as well as the money you withdraw during your retirement. The only problem with an IRA is that the government highly regulates how much money you can contribute at what age. Younger people are able to contribute less while older people can contribute much more.

Stocks

  Stocks are also a great option if you’re looking to diversify your portfolio or increase your investments. Whether or not the economy is suffering, over time stocks have seen a consistent increase in value year to year. The way investing in a stock works is you essentially purchase a small share in a company of your choice and if that company does well so does your investment. Many people consider stocks to be a risky choice especially when compared to banks and traditional saving methods. The alternative is actually true and any money kept in stocks will increase over time. There are countless options for stocks available in every market in the world and with some basic research it’s easy to arrange for a successful return on investment (ROI).

Bonds

  Bonds are one of the safest places you can put your money but also provide some of the lowest returns. As people age they typically tend to move investments from bonds to other riskier options that will provide a higher return. A bond is a debt instrument offered by the government where they accept your money to use it and in return provide you with a small return. When the government is successful and doesn’t need much money interest rates on bonds tend to be much lower and are not really worth investing in. It’s important to keep a diversified portfolio and keeping some money invested in bonds will ensure you never have to rely on any single form of income.

Precious Metals

  With so much talk of the global economy crashing and countries moving away from the dollar there has been a lot of talk of investing in precious metals lately. Gold is one of the most popular metals that people invest in but there is a wide range of other metals available. Other popular metals are silver, aluminum, zinc, and copper. Each of these including gold has seen a steadily growing value over the last few years and as the rate of consumption of these metals increases so will the value continue to increase. The reason precious metals are such a great investment is because in most cases they provide something tangible. When you are buying or trading gold or other metals you are trading something that physically exists. Many other investment opportunities have no physicality and it’s hard to place a value on something that doesn’t really exist. Industrial metals are going to be used more and more and with an ever-increasing value they are one of the best investments to make.


In Conclusion

  With so many investment opportunities available and each offering their own benefits and disadvantages it’s important to become informed of each aspect of the investment. Taking time to educate yourself on investment processes will not only save you money but will also help you make better financial decisions in the future. As we age there comes a time when there is no one else to rely on but ourselves and it’s important to begin investing to protect your future health and stay safe in you’re faced with any financial difficulties. Investing is the best way to grow your wealth and achieve financial stability.