I was having a conversation with my mentor who runs a management training program and is closing in on his own retirement. The conversation turned to his investment strategy and this is what I learned:
Investments are important financial tools for any adult. If you are able to save early, you can easily build your retirement savings through a 401K from your place of employment. However, there are many other investment options to consider when you want to save for your retirement. Here are five of the most popular options when it comes to retirement savings.
Independent Retirement Account (IRA)
An IRA is a great option for those who want to save for retirement but may not be offered a 401K through their employer. An IRA works similarly to a 401K by letting you add a specific amount of tax-free contributions each year until your retirement. With a wide range of IRA options, you can manage the account how you want to, giving you the option to take bigger or smaller risks depending on your age.
A bond is one of the safer investments a person can make. A bond guarantees that you will get back your principal plus interest as long as you hold the bond until maturity. Bonds offer low risk, but this type of investment typically has a variable interest rate that can go low depending on the state of the economy in any given year.
An index fund is a way to invest in the stock market without taking the high risk of betting on a particular company. An index fund essentially bets on the U.S. and the world economies. As long as the economy grows, you will be able to earn money from index funds.
Gold and Other Precious Metals
Gold is a popular investment, along with other precious metals such as silver and platinum. Buying gold is one of the few tangible investments you can make. While gold prices are currently as high as they have ever been, gold provides the same amount of risk as buying stock. The price of gold and other precious metals could fall without warning to investors.
Land or Real Estate
In the current economy, there is a slow shift in the real estate market that makes investing now a good option. Whether you choose to own raw land or developed property, knowing the neighborhood and the local real estate market is essential to making a good investment when it comes to the real estate industry.