Are you thinking of not thinking of your retirement life just yet? Well, you should. Why? Pension might not be enough to carry you through retirement years. If you must work in a company to save a pension for you, then consider it as part of income and not a sufficient source.
You need and deserve more, especially with the current lifestyle that is undoubtedly expensive. It is, therefore essential to diversify your retirement income from a young age or whichever time you learn the importance of it. But how do you do that?
Ways Of Broadening The Horizons Of Your Retirement Income
1. Investing in municipal bonds
A municipal bond is an amount you give to cities, states, and county governments in the form of debt security. As a purchaser, you’ll be receiving payment in the form of interest.
Ideally, it works like lending money to someone who is supposed to pay you interest per month until they can pay the full fee. Often, municipal bonds are used to fund municipal operations and other projects.
The advantage of municipal bonds is that they are exempted from federal taxes and often other state’s taxes. The investment seems risky, but it’s a form of preserving capital.
The secret is to buy multiple bonds at different time intervals so you can have varying maturity dates for your bonds. This means you’ll have a stable income stream to serve you when you’ve retired.
2. Invest in real estate
Real estate is one of the best money-generating schemes. It might require you to have more money, but it will be worth it. There are several ways you can invest in real estate and they include:
- Flipping house
Flipping houses is buying a home and quickly selling it. It’s a risky business, which means you need to gather more information about it. For instance, you can buy a house at a higher price than it actually is, and it will be challenging to find a buyer for the same price or more.
You need to evaluate the location, condition, and the value of houses at that particular state before venturing into flipping houses.
- House hacking
Sometimes, you can leverage your property as a rental. This is where you welcome someone to rent one of the rooms in your property, and they pay you. Alternatively, you can add one of your rooms into Airbnb listing.
- Crowdfunding real estate
This is a good venture because it has a minimal entry fee. It requires several people coming together to invest in a residential or commercial building. Ideally, you’ll be funding a real estate, and in return, you’ll receiving interest.
- Owning a property
Owning a property is the most common way of investing in real estate. It will require you to look for a property, remodel it then market it. This is not for faint-hearted because you’ll have to deal with tenants. However, you can delegate the responsibilities to a property management company who will be collecting rent fee and resolve other issues tenant might bring forth. This means you’ll be paying the property management some money.
3. Hire a financial advisor
It’s exciting to invest money anywhere promising, especially if you have a lot of it. But, you should seek a financial advisor to evaluate your financial situation before investing.
In other words, the advisor will look at different venues you can invest in, analyze the growth then advise you to invest or not. Remember, financial advisors have a certificate of CPA and other credentials. They, therefore, have the skills necessary to propel your money to multiply.
You can delegate all your finances to a financial advisor whose goal will be to invest your money in the right venues. However, you have to check the reputation of the advisor before hiring them. The advisor should also provide you with a monthly statement that should match with another report from a different investigator.
4. Become an entrepreneur
Becoming an entrepreneur doesn’t necessarily mean opening a business full-time. On the contrary, you can decide to do your business at certain hours in the day under your terms. Examples of part-time businesses include writing, landscaping, food delivery, and eCommerce, among others.
5. Pay your debt
How much are you left with after paying for credit cards? Relieve your income by paying your debt. Stop taking any more debt and train yourself to live within your income. Eliminate all loopholes where you’re losing your money.
Look at it this way; the longer you take to pay back a loan, the more it attracts interest. Eventually, you won’t be able to cover the loan and interest with your income. So, find a side hustle and settle your loans. The most important thing, though, is to stop taking more loans.
You can typically invest in all of the above. But, it’s wise to work on one until you make it before moving to another. Pick one stream and master it then test your feet into a different basin.