It’s a goal everyone seems to have, but can’t always wrap their heads around: saving money for the future. When so many people are living paycheck to paycheck or having a higher debt-to-credit ratio these days, the idea of saving can seem even more distant and unreachable. But, the good news is that anyone can save and prepare for the future. There are plenty of assets and opportunities to make money for the future. It involves investing in yourself and various other options that might work for you personally. Here are five ways to invest your funds to prepare for the future.
S & P 500 Stocks
The S&P 500 (Standard & Poor’s 500) is one of the main stock indexes that tracks 500 companies across various stock exchanges. Investing in these index stocks is a large part of investing in the stock market. Traders invest in S & P stocks through brokers. Investing in these stocks offers passive income, portfolio diversification, and the ability to focus on specific stocks. There is typically less market risk in this particular index and many of the companies are higher value, more reputable ones making it a better bet for doing some investing.
Individual retirement accounts are a godsend when saving for retirement. Setting up an IRA is pretty straightforward and contributing to it is just as easy. There are two popular types: traditional and Roth. Traditional IRA contributions are pre-tax, while Roth IRA’s are after-tax. As with most retirement accounts, taking money out of your IRA before age 59 can come with some tax penalties, so be aware of that before taking a distribution. All things considered, getting an IRA is a sound investment strategy for the future.
If you meet certain criteria with an employer, you may be eligible for a 401K. A 401K is a retirement account typically offered by employers. One drawback to a 401K is the accessibility of funds. Most plans don’t allow you to access them outside of the occasional loan until you reach a certain age. The best thing about a 401k is that it is possible to passively contribute to it. Contributions come directly from your paycheck pre-tax, and then can be matched by your employer. Of course, not all employers offer matches, but for the ones that do they can increase your money by quite a bit. 401K’s are easy to use and manage, but are subject to some market volatility. There are not very many drawbacks to having a 401K and it should be one of the first things you do when you get a new job (or if you don’t already have one at your current job, you may want to consider setting one up if offered by your company).
Among the many precious metals in which people often invest, gold is one of the most popular (more so than silver, copper, or platinum). Therefore, investing in gold can be a good idea for the future. Gold is a hedge against inflation, it typically maintains its value, and it can be a safe bet in tumultuous times. There are a few ways to do it. Exchange Traded Funds, mining futures, gold certificates, and stocks are all viable options depending on your investment plans, available finding, and other considerations. Another unique method of gold investing is through physical gold. That is, the actual metal. Bullion and coins are popular choices, but you just can’t beat a nice 5 gram gold bar for the ultimate in gold investing. A .9999 gold bar is essentially pure gold and will maintain its value for a long time to come. Some gold bars come with their own locking case and can easily be stored in a safe or other secure location. They’ll also be certified and able to be bought or sold if purchased through a reputable mint. So if you’re planning to invest in gold, make sure that you do your research first before making a purchase or selling your gold bars.
A great way to invest in the future is through real estate. According to Investopedia, choosing to invest in real estate can be a source of passive income, generate additional income, help reduce your tax burden, and allow you to diversify your investments. There are several ways to get into real estate investing. There’s real estate syndication where you work with a group of other investors to invest in a property, which offers its own unique returns. Then there’s house flipping where you purchase a property, fix it up, enhance it, and then sell it for a profit. Other options might include becoming a landlord for a multi-family home, investing in luxury properties, and more. Real estate can offer plenty of financial resources for the future if done right. So, considering it as one of your possible money-saving routes makes sense depending on your interests and circumstances.