5 Ways To Invest For Your Family Future
An investment portfolio has always been a terra incognita for many. While the 9-5 jobs have attracted most people, history's lesson is almost no one got rich by working 40 hours per week. But crushing 80-90-hour work weeks has done no good to anyone's health in the long term.
Even if multiple solutions exist, somehow, people prefer to listen to YouTube gurus, instead of the brightest investment minds, like Warren Buffet and Charlie Munger. Many people are unsure of how to invest for their family's future. One of the best ways is to have a family advisor help you decide what the best investments are. The family advisor will also be in charge of managing your investments, so you don't have to worry about that at all!
1. Specialized savings accounts
Whether it's a rainy day fund or an emergency savings account, it's vital to have money set aside. The easiest way for everyone to do this is to link a savings account to a checking account. By making regular deposits and having easy access to the money should the need arise to ensure financial stability. Experts don't share the same opinion, but usually, six months is considered a minimum.
A college savings account is an absolute must for a family that has kids. On the opposite side stands a quite inferior option: student loans. While student loans make children more responsible, it's debatable if it actually helps them or puts another financial burden on their shoulders they should cope with later on in their lives.
2. Pension funds
Pension funds are neglected by almost anyone in their 20s and 30s. The closer people get to retirement, the more stressed they become about their post-retirement incomes. In countries where the system is social, most of the professionals don't have to worry about it much. However, not many states can boast with great pension systems, bar the Scandinavian countries. Private pension funds are a great option where people could put aside a tiny percentage.
3. Life insurance
Anything happens in life, and nobody can feel safe about their long-term future. While the news of someone's death is never easy, life insurance provides financial support to a person's loved ones in difficult times. A widow/widower can use payouts from life insurance to cover a variety of expenses. These include mortgage payments, childcare, and, more importantly, allowing the family to move forward.
Life insurances are best for family business owners, people with extreme hobbies, and basically anyone who has children. The best way to open up life insurance is in the late 20s, just before marriage.
The best thing about life insurance is that, since the sum increases, individuals can withdraw money to buy a new car or pay for the mortgage.
4. The Stock Market
Investing in the stock market gives many parents a chance to boost their retirement savings. Although there is plenty of risk involved, many investors trust mutual fund managers to manage their assets. Other small investors in countries like Canada, in which at the time of writing the economy is growing more quickly than predicted, choose to do their own research on sites such as Stocktrades.ca to help find the best investment opportunities.
While funds are typically very safe investments, they don't guarantee dividends for individuals.
Over the last couple of years, more and more people have bought popular indices, as they are prone to rise in price. Investors don't have to share profit with a brokerage house by doing everything themselves.
5. The cryptocurrency market
The Bitcoin craze didn't miss many family men who wanted to add something extra to their family budgets. Ethereum-based dApps and non-fungible tokens (NFTs) are creating a huge buzz around the crypto community. But the crypto world is not limited to Bitcoin and Ethereum. Unfortunately, the crypto market proved to be too volatile for money and scared ordinary people off, which is why coins like USDT appeared. Individuals can buy USDT without worrying much about its price fluctuations, as it's dollar-pegged.
In general, cryptocurrencies are a new thing, but they have enormous potential. However, one condition everyone should know before starting their cryptocurrency journey is that the blockchain industry has to be analyzed, and people should not treat it like gambling.
Summary
Family investments are extremely important. According to Forbes, 55% of Americans invest in the stock market in some form. While there are plenty of options to invest in, a large chunk of Gen X investors favors the old-fashioned indices and company stocks. At the same time, Millennials tend to prefer cryptocurrencies, as they look more lucrative with high CAGR rates.