Preparing For Retirement | Week 16
“Everyone should plan for their retirement. Putting money down today can even help you recover from an unexpected early retirement.” – Bryce Ward 8/21/2020
This past week I met with my personal financial advisor to create a plan for my financial future. Considering that my main goal in life is to make work optional for myself I want to share with you some advice that I was given and discuss it further.
What is an Index Fund?
An Index Fund is designed to provide a large portfolio of different industries to allow investors a more wide spread investment. The Energy, Manufacturing, and Tech industry are a good example of the variety of industries in an Index Fund. This allows investments to be more stable and are less effected by “herd reactions.” For example if two people were to invest in an Index Fund and one person chooses to withdraw his investment. Their withdraw would not negatively affect the second person who chose to keep his money in the Index Fund Longer.
What This Means for Investors
An Index Fund makes an attractive opportunity for investors such as myself who are looking for more long term and stable investments. Currently Index Funds have had an average of 10 percent for the past 40 years reported my financial advisor. That would mean if someone were to invest $25,000 into an Index Fund and leave it alone for 40 years they would have a $3,000,000 payout. Not a bad retirement plan if you ask me!
Hey, thank you for reading this week’s post. I got to learn a lot about investing however I still have much more to learn. Are you an active investor? What has been your experience in investing and have you managed to earn enough to make work optional for yourself? I would love to hear your story in the comments below!