It's no secret that investing can help you build financial security. Whether you're planning for retirement or trying to build wealth, smart investing can help you achieve your financial goals. The common recommendation is to start investing as soon as possible. So, even if you are not where you would like to be financially, you can still slowly invest over time. From beginners to expert investors, here are a few investments that you may want to consider for a successful financial future:
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High-Interest Debt
The majority of credit card companies can charge as much as 18% APR and sometimes even more. Additionally, it is very rare that you would find an investment to match an 18% return. So, while this is not an investment, you should prioritize paying off high-interest debt because you're wasting your money every month by paying interest. Sit down and identify a plan of action for paying off your debt. Not only will this eliminate some financial stress, but it will also give you a sense of accomplishment.
Open Tax-Advantaged Accounts
Most likely, your employer has a 401k or a 403b retirement plan. These programs help employees save for retirement with tax-differed dollars. Essentially, you contribute to your account with pre-tax dollars. Then once you go to take distribution out in retirement, you will need to pay taxes.
A lot of employers also offer a match program where they will match your contributions up to a certain amount. Your employer essentially rewards you for participating in the plan and saving for your retirement.
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Buy a Home
Purchasing a home is one of many people's dreams. Depending on the market, buying a home can also be a great investment. Instead of throwing your money away in rent every month, you could be building equity with a home. If you think you're ready to purchase a home, look for a house that has high growth potential. This way you can make sure your home will appreciate in value over time. Also, be sure to have a substantial down payment and a fixed interest rate on your mortgage. This will help minimize your mortgage payment and you'll be spending less money over time.
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Investigate Other Types of Investment Accounts
In addition to your employers sponsored plan, you may want to investigate other types of investment accounts. Some of the most common accounts include Roth IRAs, Traditional IRAs, brokerage accounts, and more. Various accounts will have different tax advantages that will help with your overall investment strategy.
If you really want to ensure a successful financial future, you should partner with a financial advisor and tax professional to help you determine which account is best for your unique situation. Not only will a financial expert help you select the appropriate accounts, but they will also help you select the best investments to place in the accounts to meet your goals. That means they will help you choose the right asset mix of stock, bonds, EFTs, index funds, and more.
Purchase a Rental Property
Purchasing a rental property may be a bit of a challenge for a newbie investor. However, the more you build up your assets, the sooner this dream can become a reality. A rental property can provide a passive income stream as well as build equity in the home when it comes time to sell. Not to mention, investing in rental properties is also a good way to diversify your assets.
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Educate Yourself
The most important investment that you can make is an investment in yourself. Try to educate yourself constantly on financial literacy and the happenings within the market - that means you should always be up-to-date on financial news.
By being an educated investor, you can navigate the treacherous waters of the financial world. There are always financial experts trying to push you one way or the other. By staying at the forefront of financial news and developing your own investment philosophies, you will be able to stay on course and achieve your own financial goals.