If you ever want the possibility of retiring early and living it up, then you need to do more than work hard. Working hard gets you on the ladder of wealth, but it doesn’t necessarily help you climb it. Ultimately, if you rely solely on your income, you will run out. That’s why so many are automatically enrolled in a pension system, but if that’s all you’ve done to remain independent during retirement, it’s not enough.
The good news is that there are many, many different ways to stop working and start owning. Diversifying your investment portfolio is a great way to spread out the risk and increase the chances of a healthy payout, allowing you to put your money where it either keeps pace with inflation or even outpaces it, giving you more to work with.
While money management can be daunting, the first step is knowing what’s out there and what you can do, so kickstart your wealth journey right here with this guide.
Begin with Professional Guidance
One of the easiest ways to make your money work hard is to partner with a wealth management advisor. You can get bespoke guidance, coaching, and even access to the tools necessary to get the most out of your current financial situation. This includes starting strategic savings accounts, family planning, and even strategies designed to optimize your tax returns so that you can unlock the actual value of each of your assets.
Regardless of your stage in life or what assets you currently have, wealth management can help you reach your goals.
Start Investing
One of the ways you’ll want to start owning is to start investing. Despite what you may think, you can invest with very little money, allowing you to build up a portfolio over time with money that you are comfortable with losing (the exception, of course, is if the investment is FDIC insured).
Areas you can and should start to consider investing in include:
Stocks
There are many different types of stocks that you can invest in. If you want something more suited to beginners, stick with the S&P 500, which covers the top 500 performing businesses in the United States. You may also alternatively look into investing in smaller companies that have the potential to make it big, or in more conservative stocks (like utilities companies). The point is to: 1) always assume you can lose the money you invest, and 2) diversify your stock portfolio so that if one investment goes south, the rest don’t.
Real Estate
Another great place to invest in is real estate, and no, you don’t actually have to buy or even own a property to do it. While owning assets is a great way to build up a wealth bubble and give yourself options, you can also invest in a real estate investment trust (REIT). This works like a dividend stock where you get regular dividends for your investment. Rather than investing in one building, however, you typically invest in another’s portfolio, which could include commercial, residential, or retail units.
Businesses
If you have significant capital, you could consider investing in new businesses. This would make you a shareholder, and as a shareholder, you’ll gain access to monthly or quarterly dividend payments if the business succeeds.
Cryptocurrency
One final option is to invest in cryptocurrency, though it is heavily volatile. Bitcoin has exploded massively in value, and it is certainly getting people talking. If you do intend to invest some money in cryptocurrency, it is imperative that you stay on top of legislative news, as policy changes can drastically affect a cryptocurrency’s value.