Put money in the stock market. Invest money in stocks, bonds, or other vehicles of investment that will give you an annual return on investment (ROI) great enough to sustain you in your retirement. For instance, if you have one million dollars invested and you get a reliable 7% ROI, that’s $70,000 per year, less inflation.
- Don’t get enticed by day traders who tell you it’s easy to make a quick buck. Buying and selling dozens of stocks every day is essentially gambling. If you make some bad trades — which is unbelievably easy to do — you can lose a lot of money. It’s not a good way to get rich.
- Instead, learn to invest for the long run. Choose good stocks with solid fundamentals and excellent leadership in industries that are primed for future growth. Then let your stock sit. Don’t do anything with it. Let it weather the ups and downs. If you invest wisely, you should do very well over time.
Save money for retirement. Keep saving. It seems that fewer people are saving adequately for retirement. Some feel they may never be able to retire. Take advantage of tax-deferred retirement plans such as IRAs and 401Ks. The tax treatment they embody will help you save faster for retirement.
- Don’t put all your trust in Social Security. While it’s a good bet that Social Security will continue to work for the next 20 or so years, some data suggest that if Congress doesn’t radically alter the system — either by raising taxes or reducing benefits — Social Security won’t be available in its current form. It is probable, however, that Congress will act to “fix” Social Security. In any event, Social Security was never designed to be the only resource for retirees in their later years. That makes it all the more important that you save and invest for the future.
- Invest in a Roth IRA. A Roth IRA is a retirement account to which working individuals can contribute an annual sum of $5,500. That money is then invested and gathers compound interest. If you wait until retirement age to take money out of your Roth IRA, the money that you withdraw isn’t taxed, because it was taxed at the time you first earned it.
- Contribute to a 401(k) account. This is an account set up by your employer where pre-taxed contributions can be invested. Your employer may choose to match all or part of your contributions. This is probably the closest thing you’ll get to “free money” in your life! Contribute at least enough to take full advantage of the match
Invest in real estate. Relatively stable assets like rental properties, or potential development land in a steadily growing area is a good way to build wealth. As with any investment, there are no guarantees. Many people, however, have done quite well with real estate. Such investments are likely to appreciate in value over time. For example, some people think that an apartment in Manhattan is almost guaranteed to increase in value over any five-year period.