Investing In Future: 10 Tips
Learning about investing in future: 10 tips are essential to financial security. Creating a financial plan that covers all aspects of the future helps you to minimize risk and obtain future growth in your portfolio. Here are ten tips to maximize and preserve wealth.
- Maximize retirement accounts. IRAs allow up to a $5,000 yearly contribution, and 401K’s have a maximum contribution limit of $16,500. Take advantage of these tax deferred accounts via automatic deduction. You will save more money this way.
- Open a 529 plan for minor child. If you have a child, consider opening a 529 plan. These college investment plans help offset the costly expenses of higher education. If your state offers a prepaid 529 plan, invest in it. Investing in a prepaid 529 plan freezes the cost of a college education at today’s prices.
- Buy term life insurance. Term life insurance offers coverage for a specific period of time such as 10, 20 or 25 years. There is no cash value, but the average monthly premium for a 20 year term should not be more than $100 for $1,000,000 coverage. If you are married or have dependent children, this is essential.
- Consider purchasing real estate. Real estate prices are at an all time low. Buying a property for investment, for future use, such as a second home for retirement purposes, can not only yield income to pay down the mortgage today, but provide a future home to reside in at retirement.
- Make extra mortgage payments. Making just one extra mortgage payment reduces the average 30 year mortgage to 16 years. Eliminating your largest debt is essential to investing in your future and this is the fastest way to do it.
- Buy mutual funds that pay dividends or income. Mutual funds that pay dividends or income will usually list either dividend or income in its title. These funds continually reinvest its dividends or income which helps to grow the investment even faster.
- Consider investing in EE bonds. EE bonds offer a 50% discount on the face of the bond. Upon maturity, you would receive the face value of the bond. This is an easy investment with a guaranteed return.
- Consider investing in municipal bonds. Municipal bonds provide tax free income for the term of the bond.
- Consider a revocable living trust. A revocable living trust allows your heirs to receive their inheritance directly, avoiding costly probate.
- Set up an emergency fund. Set aside six to eight months of expenses in a liquid account.
Investing in the future creates a sense of security today. Take charge of your future so you can comfortably enjoy for life.