READY, GET SET, HERE COME THE GOLDEN YEARS
Investing today for tomorrow, part two
When we left off on the last article we were looking at changing our investment portfolio. Let’s revisit that and think also of the risks involved. Take a look at your cash reserves, both what is in the bank, and what you have, if any, in the money markets. Do you have cash you can safely pull from there to put into your equity growth funds?
If you have moved around like many people when it comes to jobs, maybe you have a long lost and forgotten 401k sitting and collecting dust. If it is like many such retirement accounts it will be stuffed with company stock and little else. How is that account performing? If it is under performing your selfH directed accounts then you should look at rolling it over to an IRA. The difference this makes could be huge. Most 401k plans let you borrow from them. With interest rates being so low you may want to consider that as an option. You should be pretty conservative with this as you will be hit by the IRS if you don’t put back in every dollar you borrowed.
Have you got a time share wasting away somewhere you never want to visit? What about a second home? If you have one are you renting it? What if you do rent it, will it help enough? What about selling it and investing the proceeds. You may live in an area where homes are barely appreciating if at all, yet the market has been doing very good. Maybe your two percent a year can suddenly become eight percent a year. You were making six thousand a year through appreciation and now by investing that in equities it has become a cool twenty-four thousand a year and that’s not even compounding interest.
Another option you could look at it becoming a hard money lender. There are people lining up to pay tent to fifteen percent for the privilege of borrowing from you. This route should be approached with great caution.
Well there you have it. I believe we have covered every possibility for making up a shortfall when planning for retirement. That is, every way short of holding up the local bank. You may find that you can accomplish your goal by changing every option just a little bit rather than a radical change in your investment strategy; for example.
This wraps up part two on investing today for tomorrow. I hope that from reading this, if you do nothing else you will find out where you stand regarding upcoming retirement. Talk to your financial planner or financial advisor and have them crunch the numbers so you know if there is a shortfall, and you find out in time to do something about it.
In the mean time happy investing and happy retiring.
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