Retirement is an important milestone in every person’s life. It’s the point when they no longer have to work and get to rest or do what they have always wanted to do.
Most retirees spend their years out of the workforce learning a new hobby or traveling the world. In fact, it’s common for older adults to purchase a motorhome RV to go on road trips across the United States and go camping with their grandchildren.
There are, however, retirees who want to continue building wealth in old age. They use their retirement fund, not for leisure, but to continue earning money despite not participating in the workforce.
To guide their decisions, here are ideas on which retirees should invest their money.
One of the best ways to build wealth in old age is buying properties with strong potential for capital gains and appreciation. Communities next to bigger cities usually have a lot of demand from people looking to buy homes, which gives property values a boost.
Many people have built their wealth through real estate. It’s still one of the most lucrative and safe investments that a person can make because there will always be a demand for housing.
Moreover, they can use the house as a vacation home or as a rental property. They can also retire in this home with a plan to sell when they can no longer take care of it in their twilight years.
Retirees should take advantage of low-interest rates and invest in real estate now. Those who are planning to retire soon can also start while they’re still active workers because their earning power increases significantly after doing so.
Bonds and Stocks
Investing in stocks has always been a popular investment vehicle among retirees because it offers earning potential that’s largely independent of inflation or other external factors that could harm bond values over time. With dividend reinvestment, stocks can grow exponentially over the years.
Retirees who wish to invest their money should diversify by investing in bonds and stocks instead of putting all their eggs in one basket. Moreover, they should not invest their money all at once but rather create a monthly budget to purchase stocks gradually.
The stock market is volatile, so retirees should also make use of stop-loss orders. They can set these orders to automatically sell securities if they suddenly drop below the price point designated by the retiree. This minimizes losses and ensures that retirees are only out money when they actually lose it.
When it comes to investing, however, there’s no better example than Warren Buffet who has built his net worth through his company Berkshire Hathaway which he runs as chairman and CEO. He started early, buying his first stock when he was 11 years old. He was able to buy Coca-Cola shares which consistently increased in value. It turned out to become Berkshire Hathaway’s most lucrative investment.
Buffet has been a boon to the economy through his investments which have helped diversify the market and made him one of the wealthiest people alive today.
Retirees should consider following Buffet’s example by investing in several assets, including real estate, stocks, and bonds as well as collectibles that may increase over time.
Retirees can use their decades of experience in the workplace to continue earning money. If they’re the type who dislikes working for other people, they can try working as an independent contractor. Contractors are paid per project or through commissions which vary depending on the type of work done. They can also work as a consultant for small businesses and large companies.
It’s still work, but it will be different from what they used to do when they were still part of the workforce. Plus, they’re able to dictate their own time and work at their own pace. Their wage will also vary according to how many hours they put into their work.
Retirees may also want to consider starting their own businesses using their accumulated knowledge and experience in a particular field. With the internet, it’s easier than ever to start small and grow from there by taking advantage of e-commerce platforms such as Shopify which allow users to sell their wares online and at fair prices.
Most retirees spend their retirement years traveling or learning a new hobby. However, there are those who want to continue making money by investing their retirement fund in assets such as real estate with high potential for appreciation and capital gains, bonds and stocks that offer dividend reinvestment, and collectibles whose values increase with age.