09 Jun Alternative investments and if they are right for you
With every new stage in life, we usually end up introducing ourselves with questions; “Am I ready? What will it be like?” and most importantly “How am I going to handle this?”. With retirement in particular the most popular question is if you are actually ready to retire. If you have a reasonable nest egg saved up along with a few other minor stipulations, you are most likely ready to retire. Now the biggest question becomes “How am I going to do this?” or better yet, “What is the best way to do this?”.
The usual strategy is to put your retirement savings into a conservative portfolio of stocks and pulling out from your fund at about 4% annually. However, our world and our lives are a lot more complicated than a budget set for 4% withdrawals. There are many unforeseen circumstances that can hit you and your retirement fund in ways that you couldn’t have imagined, or, prepared for.
This is where alternative investments come in. Alternative investments are basically any kind of investment vehicle that functions outside of the realms of stocks, bonds, and cash. These could include; real estate, private equity, land leases, and many more types of investments. So how exactly do they prepare you for unexpected turns that the stock market can’t? Well this really depends on your financial goals for retirement. Many of these different types of investment vehicles are versatile in what they can add to your portfolio. This all depends on what you care about most; liquidity, security, or growth.
For instance, we are all aware of annuities. Although they are able to give you a consistent income throughout your retirement, they can also restrict what you are able to do with your money once you place it in the annuity with all of the rules and stipulations. But if security is what you are most after, an annuity might be right for you.
Then there is real estate investments. These leave you and your investment under the influence of the real estate market, but they also give you more control and an income that is much easier to understand than most traditional investments. You also enjoy much more control over your investment, especially if you need to liquefy this asset or control its goings on.
In the end, the vehicles you invest in are all liable to your goals in retirement. Whether you are looking for Security, Growth, or Security, there is an investment vehicle out there that can help bolster your retirement portfolio in the exact way that you need. If you are unsure about the preparedness of your retirement portfolio , contact me now and figure out the best way for you to Plan Smarter & Live Better.