If through hard work and dedication you’re in your 30s and have a sizable fortune, the question now on your mind will be whether you should continue investing your money?
If you’re one to take notes from the likes of Warren Buffett, Bill Gates, and Elon Musk, the answer is a resounding yes. After all, Forbes reports that 67% of billionaires were self-made in 2018, well in their 30s. And that’s all because these people weren’t just investors, but entrepreneurs.
That being said, if you’re looking to spend your money wisely, your investment options go beyond just dabbling in the stock market. Here’s what else you can do with your hard-earned cash.
High-yield savings accounts
Though it may seem counterintuitive in terms of always ensuring your money is earning, most wealthy investors consider a large savings fund a crucial part of their investment strategy.
With a high-yield savings account, which offers higher rates of return than average, you can put aside up to half a year’s worth of living expenses. This way, you can make up for any losses if you decide to take on some high-risk investments like forex. You’ll also be able to focus on increasing your passive income without worrying about your day-to-day expenses, letting you increase your wealth faster.
One mistake investors make is to invest in what’s hot. Wealthy investors instead decide on where they want to be in the next few decades, build a strategy around their goals, and stick to it. You can do this with index funds, which track the index of a particular market. This involves passively investing in all the stocks or bonds in your chosen index through a fund manager. Index funds are relatively low-risk, as they’re less volatile.
And since you’re young, there’s more time for your returns to compound, or increase exponentially over time. So, for instance, if you invest $10,000 in an index fund at an annual return rate of 9%, you’d have $10,900 after the first year, $11,881 after the second year, and $163,363 after 30 years.
If you’re looking for a more practical investment, however, there are some plans that easily let you ensure the future of your family. The government-provided RESP or registered education savings plan is one of them, and it lets any Canadian resident save for a child’s post-secondary education. You can open a RESP account for anyone below the age of 21.
However, regular RESPs are only applicable to one child. If you’re looking for more flexibility, try the family RESP. This is applicable to anyone you’re related to, including your children, nieces, nephews, and even your future grandchildren. This means that you can literally plan generations ahead, especially if your kids won’t need to use RESP funds when the time comes.
When investing, however, don’t limit yourself to solely intangible assets. Real assets can help diversify your portfolio and balance out the volatility of non-tangible investments.
Collectibles like luxury watches or rare vintage items, for instance, have great potential for appreciation, and the items can be passed down to future generations. Meanwhile, gold is scarce and highly liquid, so it will always be valuable even when the market is volatile.
One asset that many investors swear by, however, is real estate. This is especially true if you’re interested in longer-term investments, thanks to real estate’s return rates and tax benefits. Plus, there’s a multitude of things you can do with real estate, such as renting out your properties to receive passive income all year round.