I’ve never met anybody who didn’t want to retire early. Retiring earlier means you can enjoy life more, especially if the difference is big. A 10-year gap can be the difference between retiring with a healthy and able body that can travel, or retiring with a beaten down system which needs looking after. To enjoy your later days, you are aiming for the first scenario – retiring early.
Investment in General
Right now the average retirement age is 63, an age where most people are still quite able. Imagine the difference if you could retire at 53 though – or even 48! To get there you have to be smart with the cash you earn – save what you can and use compound interest to your advantage. At the same time, the interest from your savings account isn’t going to bring a lot of cash in, which is the trade-off for being such a save investment.
The better option is to spread your money through some higher return investments and some safer, lower return options. Some people already know about this too, but the question is when and where do you start?
Beginner Investing
The answer is that it’s best to start as soon as possible. There is no such thing as being too young to invest. Right now only a little more than half of Americans have investments, but if you split the population in half based on earnings, more than 90% of the top half hold investments. For the bottom half, only around 30% of people hold investments. This should tell you enough about how important investing is for successful people.
Whenever you are ready to invest you can begin to look at the options available to you. There are countless ways to invest. You could sink your cash into precious metals like gold and try to get a return that way. Stocks and bonds are other options, as is buying part of a business or investing in real estate. If you have special knowledge which could help you in any of these areas, take advantage of it and focus on that area for your investments.
If you don’t have any relevant knowledge, it’s a good idea to talk with a financial advisor or investment firm before jumping in. They can advise you on the best investment strategies for your situation and your needs. It doesn’t take long either, you could visit CommerceTrustCompany.com today and get started on a solid strategy for your retirement plan immediately. Even if the funds for investment aren’t available right now, it’s a good way to find out what numbers you need to be saving for and where they’ll be going.
Exceptions
There are two big exceptions which can stop you from investing immediately. The first one is if you still hold high-interest debt. This is any debt which has the annual interest of over 10% since that can compound very quickly. Low-interest debt, like a mortgage, isn’t such a problem but even that can add up over time, so keep an eye on it and know when to pay low rate debt off as well.
With higher rate debt, you want to get rid of that before investing because you can lose more money in interest payments than what you are earning from your investments – so you’re losing money overall anyway. By paying off the debt, you plug that hole and stop losing money to interest.
The second exception is an emergency fund. Life is unpredictable so you should always have a few months expenses kept away in an emergency fund – one that you can access quickly. Until you have built an emergency fund, you’re vulnerable. Once you have it, you have created some security for yourself no matter what happens. Only after that should you think about investing.
