Why you should start investing at 40
If you start investing at 40 you may be apprehensive about your potential earnings. But don’t fear, it’s never too late to start earning. This article covers all you should know about starting to invest at 40, why you should invest, investment strategies for 40-year-olds, and the best investment options.
- Why should you start investing at 40?
- Investment strategies for a 40-year-old
- The best investment strategies for a 40-year-old
- Saving tips for retirement if you started late
- Invest on MyConstant today for 7% interest and less risk
Here’s something you may not have thought about when you celebrated your 40th birthday: You’re almost as close to traditional retirement age as you are to your high school graduation.
From family expenses to planning for retirement, your 40s can be a stressful time for your wallet. While investment is a waiting game and 40 may seem like it’s too late to get a great ROI it’s always better to invest than not.
Here’s why you should get started today and some ideas on how to start investing at 40.
Why should you start investing at 40?
Why should you start investing at 40? A very interesting question! You should start investing at age 40 to retire a millionaire!
Yes, you read right. While gaining that kind of capital in a mere 20 years may seem impossible, if you save properly, and invest in the right things you’ll be surprised how fast things can add up.
Think about it: if at 40 you sock away $40,000 a year for 25 years with no extra interest you’ll have $1 million by the time you’re 65. While $40,000 a year may be a bit unrealistic for some, throw a little interest on top of your savings and you may be closer than you think.
Plus, statistically, 40 is around the time when your salary peaks. Maybe you aren’t making quite what you want right now. But give it five years and your savings may increase astronomically.
Investment strategies for a 40-year-old
Investing at every age comes with different strategies and pressures. There’s a huge financial difference between investing strategy at 20 and 40.
Your financial plan is usually closer to a retirement checklist at 40. You are likely caught between a looming retirement encouraging conservative investment and the desire to make a bunch more money quickly encouraging risky investments.
Before investing you should make sure you hash out:
- Your sources of retirement income
- How your income will be taxed
- Your retirement expenses
- Your retirement date
The best investment strategies for a 40-year-old
Have a retirement goal: You need to know much income you want by the time you retire. This helps you set targets and remain on track.
Be precise: Allocate your assets correctly and find a balance between conservative and aggressive investment.
Set up an automatic investment: Setting aside money automatically is a great way to make sure your investments happen.
Decide your risk level: Conservative investment is risky if you don’t have much money and want a large amount for retirement. Aggressive investment is risky because if you lose money, you won’t have much time to make it back. You need to decide exactly what you can afford to invest and lose.
High risk, high return options to consider
- Real estate
Low risk, low return options to consider
- Mutual funds
- High yield savings
Saving tips for retirement if you started late
An interesting piece of advice we found online for you parents out there: don’t skimp on retirement savings to send your children to college.
Your kids have more options and opportunities than you do. They take out student loans but you can’t take out a “retirement loan”.
Here are some other saving tips for late retirement plans at 40;
Play catch up— At 40, you can save $19,500 a year in a 401k retirement fund. At a 7% rate of return, you could have $1 million before you hit 65.
Understand how much you’ll need— Once you retire be prepared to withdraw at least 3% of your retirement portfolio each year.
Factor in insurance—You’ll need health insurance, car insurance, and maybe even disability insurance.
Pay your debts— Pay off credit cards, car loans, and other high-interest or non- mortgage debts.
Also, be on the lookout for investments that can give you the best returns with the most safety possible.
Invest on MyConstant today for 7% interest and less risk
At MyConstant, we’ve created a peer to peer investment platform with less risk. That’s because all loans on our platform are 150% protected by collateral and we have yet to have an investor lose principal on our platform. When you invest with MyConstant you get:
- To set your own rate and terms
- Interest rates as high as 7% APR in Crypto-backed.
- Your money automatically earning 4% APY in our Flex account (with anytime withdrawals)
- 24/7 customer service
- Plaid integration
- A convenient mobile app to track your investments on the go
Sign up for a free account today and see how we can help you do more with your money.
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