Planning for retirement is a concern for many individuals, particularly when it comes to having enough funds to sustain themselves during their golden years. To address this concern, experts recommend investing in “long-term assets” that generate passive income and increase in value.
One option is a high-yield savings account, which offers higher interest rates compared to traditional savings accounts. By switching to a high-yield account, individuals have the potential to earn thousands of dollars more in interest, providing them with an additional source of income.
The real estate market is another popular option for generating passive income. With the potential to earn rental income and property value appreciation, real estate offers several advantages compared to other asset classes. Additionally, real estate investments provide tax benefits, cash flow, and the opportunity to leverage capital.
Dividend-paying stocks are also a viable choice for generating passive income. Companies like Procter & Gamble and Johnson & Johnson, known for their consistent dividend payments, can provide a regular stream of income. Historically, these stocks have offered good returns, making them an attractive option for long-term investors.
Broad market funds, also known as index funds, are investment vehicles that seek to replicate the performance of a specific market index, such as the S&P 500. Investing in broad market funds allows individuals to generate passive income through appreciation and income generated by the fund’s assets. These funds offer diversification and profitability.
Annuities are another option for generating passive income, especially for those approaching retirement. Annuities offer regular payments over a specific period in exchange for an initial payment or periodic contributions. They can provide the guarantee of lifetime income and protection against inflation.
While each of these long-term assets has its own advantages and considerations, they share the common goal of generating passive income and providing financial security for the future. By diversifying their investment portfolio and exploring these options, individuals can work towards earning money while they sleep and ensure a comfortable retirement.
Sources:
-Max Lane, CEO of Flourish
-Dr. David Phelps, CEO of Freedom Founders
-Taylor Kovar, CFP and CEO of The Money Couple
-Rubina Hossain, CFP and contributor to Annuity.org
-Evan Potash, Wealth Management Advisor at TIAA