Successfully investing for your retirement means utilising the power of compounding. By starting your retirement plans early, you can build up a fortune enough to enjoy your retirement years with no worries.
First Things First
Make sure you have an emergency fund. This should, ideally, be worth three to six months’ worth of expenses. Having an emergency fund will safeguard your living expenses in case you get into a financial bind. Once you’ve done this, begin an investment only account. Any amount you put into this account should go solely into investments. As you fill up the account, study the assets you want to invest in.
There are four general asset types when it comes to investing. The first type is a business. Investing in a business can mean either starting your own, buying an existing business, or buying a franchise. The second is to invest in paper assets. These include stocks, bonds, and mutual funds. Your third option is to purchase commodities such as gold and silver. Most common, and perhaps easiest to get started in, is real estate.
Investing for Cash Flow
One of the best ways to invest for cash flow is to go into real estate. Begin by researching real estate investment opportunities. These can be anything from foreclosed properties in central areas like Bukit Timah to newer projects launched in the east like Paya Lebar Quarter. Your goal is to learn what’s possible to invest in and what can be profitable.
When it comes to real estate investment, you have the option of putting up only a fraction of the cost while the bank covers the rest. However, you own all of the appreciation value of the unit. That said, you need to look out for how much your rental real estate earns. Ideally, the rent will be enough to cover the mortgage on the unit and any other related expenses.
Keep It Going
Investing is a cyclical endeavour. Keep growing your investment account while you wait for your initial investment to return. Keep using this to reinvest in more assets. That way, your portfolio will include enough assets to support you upon retirement.