Retirement Planning for Millennials
The millennial generation is known to plan ahead in life. Next summer vacation – booked. Latest gadget – ordered. International concert tickets – purchased. The generation works hard, works smart and knows the importance of planning and executing. So, if you are of the millennial generation, you should agree that the planning to a comfortable retirement should begin now. The days of getting a job for life with a secure pension are gone. Nowadays, one has to plan ways and take initiatives to create pension arrangements, especially if one is planning to retire early. The advantage of starting now or early is that you will have plenty of time to benefit from your early efforts. Here are few financial moves that will help you plan your retirement better.
Eliminate debt. Grow wealth.
First and foremost – reduce liabilities. Which means avoid spending money on things that will lose financial value or have no value in the coming years. Also, pay off other debts such as credit cards and consumer loans, otherwise you'll be paying unnecessary interest that could otherwise be put towards your savings. While you do so, you need to also focus on accumulating things that grow in value – investing and watching your money grow, through things like stocks and real estate. If you make this a regular thing, it will help you develop a high "net worth" calculated by how much your assets exceed your liabilities. You can't retire unless you have a high net worth, and you can’t get there unless you make the right financial choices – especially by starting now.
Assure yourself to get insured
This generally doesn’t come as a priority to most but trust me it should top your list. You may think that health insurance is a waste of money because you are young and in good health. But if you truly want to gain financial independence and work toward an early retirement, you must be properly insured. After all you don’t want to leave the power to the uncertainties of life. It's hard to save and invest regularly if you find yourself saddled with pocket burning medical bills. Even if you have insurance now, review your policies to make sure you're covered at the right levels. Not having apt insurance can send your financial future off track. Please review to keep it moving on track.
Don’t wait for an emergency, have a fund
Like we were talking about the importance of having insurance, it’s also important to have an emergency fund allotted for unexpected events in life. You never know how life might surprise you, and sometimes events can blow a hole in your budget unexpectedly. The car may need replacing, you fall in love with the home of your dreams, or a once-in-a-lifetime investment opportunity comes along. Now how would you say no to that! So, start putting some money aside so that you can take advantage of that opportunity at that point in time.
Diversify your investments
A broad range of investments is also an important component to your planning. Here you should think and act big. Sticking to a narrow portfolio of domestic investments could hamper your ability to turn a profit. Besides investing in diverse funds, consider owning real estate, whether that’s private rental units or commercial property. Most people doing well today either have a good pension or have passive income from investments in real estate. But it’s important to understand that real estate is a long-term investment opportunity, and people looking to retire soon should definitely explore the market!
Let your hobby, pay for you!
The passion for travelling, photography, the guitar classes, you took as a teenager, that’s worth something. Isn’t it? Cash it to accumulate enough money for an early retirement. Sometimes, your day job may not be enough, hence you can look for other ways to generate cash. And it can be a lot fun! This may mean freelance writing or playing guitar at local coffee shops. Maybe it's tutoring math, working as a DJ, or doing anything that your are good at. If you're young, you have energy and freedom, and the ability to make some cash on the side. Earn it, invest it, and watch it help you retire for good from work at an early age.
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