It's never too early or too late to start investing in your future. Whether you're just starting out in your career or you're nearing retirement, there are wealth creation strategies that can suit your needs. Here are 10 of the most popular options to consider.
- Contributing to a 401k or other employer-sponsored retirement plan
- Saving regularly in a personal IRA or Roth IRA
- Investing in a taxable brokerage account
- Purchasing real estate
- Starting a business
- Becoming a silent partner in a business
- Investing in stocks, bonds, and other securities
- Putting money into mutual funds and exchange-traded funds
- Using dollar-cost averaging
- Sticking to a long-term investment strategy
Strategy Snap Shot
- Contributing to a 401k or other employer-sponsored retirement plan: This is one of the simplest wealth creation strategies, and it doesn't require you to do anything beyond signing up and contributing regularly from your paycheck. If your employer offers a 401k match, that's even better, as it effectively gives you a 100% return on investment from the outset.
- Saving regularly in a personal IRA or Roth IRA: An Individual Retirement Account (IRA) is a great way to save for retirement on your own, outside of an employer-sponsored plan. With a traditional IRA, your contributions are tax deductible, while with a Roth IRA your withdrawals in retirement are tax free.
- Investing in a taxable brokerage account: A taxable brokerage account is an investment account where you can buy and sell stocks, bonds, and other securities without paying taxes on the gains until you withdrawal the money (known as selling "investments held long term"). This is different from a retirement account like an IRA, where you pay taxes when you contribute but not when you withdraw the money in retirement.
- Purchasing real estate: Real estate has been one of the best performing asset classes over the long term, and it can offer both appreciation potential and rental income streams. Of course, purchasing property isn't for everyone, as it requires significant upfront capital and ongoing maintenance costs.
- Starting a business: Starting your own business is risky, but it can be hugely rewarding both financially and personally if things go well. If you have an entrepreneurial inclination and access to some start-up capital, it's worth considering this option as a wealth creation strategy.
- Becoming a silent partner in a business: If starting your own business sounds like too much risk for you, another option is to become a silent partner in someone else's business venture.
- Investing in stocks, bonds, and other securities: One of the most common wealth creation strategies is simply buying stocks, bonds, and other securities. Artificial intelligence can help you with this journey.
- Putting money into mutual funds and exchange-traded funds: Mutual funds pool together money from many investors to purchase underlying investments like stocks.
- Using dollar-cost averaging: Dollar-cost averaging involves investing fixed amounts of cash into an investment on regular intervals
- Sticking to a long-term investment strategy: Another important wealth creation tip is to stick with your chosen strategy for the long haul rather than trying to time the market by making frequent changes.
Often, the best thing you can do is simply choose an investment strategy that makes sense for you based on your risk tolerance and time horizon then stay the course come hell or high water!
Do your due diligence in any strategy. Make sure to consult with a financial professional to further research your strategy.
Change Wrap Up
There are many wealth creation strategies available to investors today, but not all of them will be suitable for everyone depending on factors like risk tolerance and time horizon. However; choosing the right strategy for you then staying disciplined enough to stick with it over time can help ensure that you reach your financial goals!