In its most basic form, investing is a way to create long term wealth. It’s pretty simple and the payoff can be great. With investments in the markets you’ll have excess cash for retirement, education, recreation or if you choose you can leave those monies to your next generation. It doesn’t matter if you’re cash stock pile is huge or small, investing basics are for everyone.
Its important that you know exactly what your goals are and just how you plan to achieve them. College fund for the kids, retirement for you and the wife, whatever your reason you must continue to remember it in order to give you sufficient motivation over the long haul. For example if you put two thousand right now into the stock market and it grew ten percent per year, (the S&P historical average,) you would have over thirty thousand at year thirty. That may not sound like a lot for the amount of time invested but what if you put in two thousand a year? Over the same thirty years you would have well over one million dollars in savings but you’ll need to come up with a plan and stick to it. Consulting a qualified financial advisor is never a bad thing. Of course, there are plenty of interesting investment opportunities around that can be worth investigating, depending on your own situation. For example, DRIP investing can be a cheap way to slowly build some stocks. And then there are more obscure investments, for example lawsuit settlement loans. These can be made profitable when an investor finds an individual who is receiving a structured settlement payment and would prefer a cash lump sum. These individuals are often willing to ‘sell’ their ongoing payments in exchange for a lump sum substantially less than the total value of the payment.
Perhaps you don’t have two thousand to invest in the market right now, many of us don’t. But lets say you decide to take your lunch to work and invest the extra $4 per day, and you only do that two hundred and fifty days a year. It isn’t very much but if you are in your early 20’s you have the best thing of all on your side, time. The historical average growth of the market since 1926 has been ten percent, if you just get that then after forty six years in the bank, or when you turn sixty four, the money will have grown to well over one million.
As your financial abilities grow so should your investment in put. If you increase the amount you put in each month from $120 to $280, you will hit the million dollar mark a full seven years ahead of schedule. This is achieved because of the beautiful power of compound interest. Every time you earn interest that amount is dumped back into the pot and the coming years interest is based on the increased amount rather than the principle.
There are a great many ways to invest your money, from annuities to stock portfolios to buy structured settlements online, make sure you consult a financial planner before making any long term plans.