Future Frame of Mind: How to Invest for the Long Run

Written by  //  2016/08/25  //  Money Management  //  Comments Off on Future Frame of Mind: How to Invest for the Long Run

If you are like most people, you hope to retire and enjoy your golden years without having to worry about money. To accomplish this dream, it is important to think about your finances today. Learning simple ways to invest for your future will make it possible to gain security and peace of mind so you won’t be strapped for cash as a senior.

Enter the Stock Market

Although some people view stock market investing as risky, it is a smart method for earning long-term gains. Choosing a few key stocks and watching them grow over time is a solid strategy for accumulating future wealth. The best advice from successful investors is to research your options and decide if a stock’s current price represents its potential for growth. Also, it is never wise to follow "hot" tips. Relying on information from unknown sources is like gambling with your money.

While some tips are good, most never work out. The same can be said for penny stocks. Even though penny stocks cost less than other options, risks are high and you can quickly lose your entire investment. As a long-term investor, it is best to consider the big picture. All stocks may experience short-term decline. However, if you select low-volatile investments, you should have few worries.

Purchase Bonds

To ensure long-term financial success, many investment managers recommend you maintain a diversified portfolio. Since bonds provide a predictable amount of income, they should be an important part of your investment strategy. Treasury bonds are extremely safe and bring little risks. They offer better interest rates than savings accounts as well.

A bond with a maturity up to 10 years should be sufficient for long-term investment. Its yield is better than a short-term bond, and it is less volatile. How much of your portfolio should include bonds, though? Bond investing depends on your age. If you are young, your portfolio should contain more stocks. As you near retirement, the stock-bond ratio should change, and you should be shifting your assets to bonds for heightened stability.

Open an Individual Retirement Account

Individual retirement accounts or IRAs, are smart ways to invest for your future. With traditional IRAs, you contribute money that you can deduct on your taxes, and any earnings may grow tax-deferred until they are withdrawn. Since many retirees often fall into lower tax brackets than when they were working, the money is taxed less. With Roth IRAs, you contribute money that has already been taxed, and the money grows tax-free. Withdrawals during retirement may be tax-free as well. 

Consult with a Financial Services Manager

Since you may not have any idea how to approach your finances or how to invest your money for long-term success, it is smart to consult with a financial planner who provides services for wealth management. Some of the most successful strategies for retirement must be started at a young age. A Salt Lake City wealth management firm will explain the best ways to save your money and will offer insights on how to make the most of your employer’s benefits package. Sometimes they may even recommend measures like rebalancing your investment account. Planning with an expert in the field is the perfect way to get started with a solid future or to help untangle a mess of finances.

Did you just start your first job and want investment tips for your future? Are you years away from retirement and need help getting your finances in order? The above tips are ways to plan for your future and invest for the long run. For ultimate guidance, it may be best to speak with a professional financial planner. Saving your money and investing carefully will help make your golden years as enjoyable as possible.

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