Alternative Investments for a Comfortable Retirement
As we save up for retirement, that endgame goal may seem like it’s never going to come. We toil, scrimp, and save for the moment when we can stop working and live our golden years comfortably.
The goal of retirement is to walk away from the shackles of a job you may despise, and head toward financial independence. This doesn’t necessarily mean you have to stop working at 35.
Retiring early means you no longer have to put in the 9-5 and you can pursue your dreams. However, you will need to create a strategy to get to where you want to be, and that means savings, investing, and sticking to a plan. A good way to get started is looking into alternative investing.
How Can Alternative Investments Help Me Retire Early?
While it’s not the only piece to the overall puzzle of early retirement, invest is a large part. Without carefully planned out investments, it can be incredibly difficult to achieve your retirement goals.
Alternative investing allows for asset variety; you can add things like real estate, promissory notes, and precious metals to your investment portfolio. Of course, you can’t rely on just any investments and hope they work out. As you make your selection, you need to have a plan in mind.
Figure Out Where You Stand…Financially
Before you create a strategy, discover where your starting point is. Map out all the points of your current budget: how much you have, how much you are spending, and how much is needed for bills. Gather your bank statements, pay stubs, and monthly bills to determine how much you are currently making. What are you spending your money on? How much are you putting away?
If you’ve already started planning for retirement, you may already have a few assets. Once you have a baseline of your income, spending, and debt, you can make a plan of action.
Settle on a Retirement Goal
After narrowing down your current finances, it’s time to look to the future. What are your plans for retirement? Are you planning to work, travel, take up hobbies, or make big purchases? Consider everything that you will need for your daily expenses, like bills, taxes, groceries, and other living costs.
Don’t forget to account for all expenses, including emergency situations like health issues or sudden disasters. Crunch the numbers and come up with a sum you can live off. Set the number and create small goals to get you there.
Pay Down Debt
One of the first goals you need to achieve to retire early is debt-free living. Getting rid of your current debt will help you save in the long run. If you have looming debt, that eats into your retirement funds. Of course, with some investments, such as real estate, you may have to incur some debt to move forward.
However, unlike credit card or student loan debt, real estate investment will bring in funds to pay for itself. Pay down on any debt that keeps you in the red. The sooner you get out of debt, the better for your retirement.
Research Your Investment Options
Once you’ve started to pay down the debt that leaves your account in the red, considered the investments that will earn you green. With alternative investments, you have plenty of options. This type of investing allows you to build a wider portfolio for secure, long-term savings.
It also gives you a chance to use what works for you. Beyond the traditional stocks, bonds, and mutual funds, you can branch out to other areas like real estate or business investing. As you perform your due diligence, it’s crucial to note that diversity is key. Consider the amount of risk you are willing to take, and cautiously select your assets.
Maintain Your Budget
If the goal is to retire early, some sacrifices need to be made. Keep your expenses in check and change how you spend. If you want to retire early, the best way to save is to hold off on charging large purchases, monitoring your accounts so you don’t overspend, and living within your means.
Sadly, that may mean dining out or vacationing a lot less. You can also pick a side hustle; work extra now so you can live freely later. If you enjoy it enough, the side hustle may become your goal job. If you want to retire early, you must take the proper steps today.
Monitor Your Investments
As you save up for retirement, keep in mind your investments should be a balance of long-term and short-term payoffs. If you let them sit in the hopes that they will accrue money, you may be in for a bit of a shock when the ROI isn’t what you were expecting. You must be active in your alternative investments; make sure they are all working for you. Monitor your portfolio, keep up with your properties, and allocate money properly to get the most out of your assets.
Maintain a Balance
Early retirement requires dedication, persistence, and due diligence. That and a thrifty lifestyle. If you tap into alternative investments, it is very possible to achieve your retirement goals with a little planning.
Of course, before making any investment decisions, consult a trusted Horizon Trust financial advisor to see if early retirement is an option for you. Take the first step and start planning today.