The last year has taught us how unstable the world economy and therefore our current financial infrastructure truly is. If you haven’t considered it before, now you may be wondering what the future has in store and how you can possibly prepare yourself accordingly. Building a realistic and straightforward investment plan will help you feel in control of your finances and help you plan for yourself and your family’s future. It is possible to achieve a financially balanced lifestyle and it starts by looking into these 8 worthy investments for any family.
1. Recalculating Expenses and Savings To Determine How Much You Can Invest
The current pandemic has changed the way life functions. It is now a new norm for many people to work-from-home, meaning we have more time and fewer commutes. For most households this means monthly transportation costs have been reduced, everyday purchases of food for late nights at the office have also been eliminated, and monthly daycare costs are a thing of the past. This freed-up money can now be allocated towards other household expenditures, lifestyle costs, and savings to name a few.
Recalculate the changes to your expenses, finances, and the like based on your new day-to-day and expected working structure. Many businesses have already announced work-from-home being the new norm or are beginning to implement new policies for the future of their workforce. Take into account both current and expected changes to see where you can save money and how much money you now have to work with. Consider how much you spent on healthcare in 2020 and look into a health care plan or upgrading your current plan to save money in the future. Understanding your current situation, where you are saving money, and where you are spending more will help you grasp where to start investing and ensure that investments that require monthly payments – will be covered.
2. Refinance Outstanding Loans
One way to decrease expenses is to look into new refinance options for those large ticket items such as your mortgage or car loans. With interest rates at their lowest point in years, you may end up saving a pretty penny as time goes on. Start by considering how long you plan to live in your current home, the interest rate you are currently paying, consider your current credit score and do the calculations carefully.
If you are able to pay off your home more quickly now than in the past, this is definitely something to consider. Another reason to refinance would be if you have gained enough equity in your home to take out a loan without the need for mortgage insurance. Do the calculations and know the simple rule is if you can refinance for an interest rate that is 1% or more below your current rate then this is definitely something to consider.
3. Increase the Value of Current Investments
Now that you have figured out how much money you are working with, you can begin looking into increasing the value of the investments you currently have. Although it may not seem like it your IRA and 401k are investments into your future. These investments come with added perks such as tax-free distributions – depending on the type you have. When it comes to your 401k, you want to match your employer contribution, if you have been paying below that, this is definitely an investment to consider.
If only one member of the family has an IRA look into a spousal IRA account. If your combined income has changed it might make sense to change the type of IRA you have from a Roth IRA to a traditional IRA or vice-versa. Regardless of your situation or what you choose to do accordingly, the younger you make the decision and the more you learn about your options and the plans available – the better bang you’ll get for your buck.
4. Life insurance
When we think of investments, they are normally in the scope of our lifetime, but that is simply not the case. Just like wealth is passed on in our inheritance many debts can be passed on as well. By taking out a life insurance policy you are helping cover all of your bases and preparing for the worst-case scenario. The younger you are when you take out the policy the better the payments will usually be and nowadays you can actually get a policy online. Bestow offers various term life insurance policies that are affordable and can be done in a matter of minutes. Looking for a truly worthy investment? Protect your family’s future and be rest assured that you helped take care of them – even from beyond the grave.
5. Invest in the Housing Market
With interest rates at an all-time low – if you have the funds now is the time to purchase property and invest in the real estate market. Rather than paying your rent with no added benefits, real estate is a sound investment that offers you and your family an appreciating asset. By purchasing a home you break free from these monthly payments. You are actually creating a portfolio for yourself that ensures all future payments are actually investments into your home versus the pockets of a property owner. If you have your own business and are now working from home many of your expenses within your home can be written off as business expenses including your mortgage payments and insurance.
6. Explore Market Changes
The market is undergoing an entire makeover and with that many new investment opportunities are coming to light. Companies that assist in the work-from-home culture are booming and digital services such as eCommerce, digital payments, and communication applications are growing at rampant speeds. Start looking into stocks or investing in companies that are helping the world embrace this new culture. Diversify your portfolio across numerous industries with investments in high-risk stocks and low-risk bonds. The more diversified your portfolio the more likely you can weather the storm of our future economic landscape and not only get out alive but ahead.
7. Jump on New Opportunities
The market is changing, and that means opportunity. If you had an idea for a business before, now may be the time to go wild with it. With numerous government grants available and an economy ripe for the picking, start your business and reap the benefits. No need to quit your job, with the extra time saved on commutes, and getting dressed in the morning you can start your side gig without needing to give up your stable income. This is the best-case scenario and gives you the time you need to slowly create your business plan without needing to jump all in. Having a second form of income is more common than you think and is what truly differentiates the working class from the elite. It gives you the chance to challenge yourself, build up a repertoire and follow your passion. Invest in yourself and enjoy the fruits of your labor now and in the years to come.
8. Plan For The Future
Investments are all about the future and in the midst of our current pandemic, opportunities are dropping like flies around us. Many people are indeed struggling but with any large shift in the world economic landscape business ventures and investment ideas, are ripe for the picking. Where some seem a wall, others see a ladder, and by looking at all aforementioned factors you may be richer than you think.
Investing finds itself as an umbrella term that does not need to be just the purchase of stocks or bonds. Even though these are great ideas taking into account everything you pay for, pay into, and are paying off can give you the much-needed clarity you need to see the opportunities at your doorstep. Recalculate your expenses and disposable income to determine what you are really working with. Decrease your debts through refinancing and start increasing the value of current investments through larger contributions. Look into insurance plans such as health insurance and if you can cover the whole family, take out a better plan and reduce monthly medical bills or combine your work and personal insurances to get a better rate. Start considering and applying for life insurance to cover your bases, and with companies like Bestow, it can be as simple as a few minutes to get the protection you need to rid yourself of sleepless nights in the future.
A wise man once said, “There is never a better time than the present”. This is undoubtedly true when setting up a system for achieving financial freedom. Consider these 8 worthy investment ideologies for the utmost in financial security that is perfectly suited for your household. Make the right moves in your finances today and guarantee financial health for many years to come.