You are making good money. Some of that money is coming in the form of stock options, RSU’s or possibly bonuses. You’re contributing to your 401k, holding on to your stock options from your employer and now are looking to take your investing to the next level.
Here are 5 Investing strategies you can consider to help you get there.
#1. Invest in yourself
This is listed as number one because investing in yourself normally brings the best returns, and it extends way beyond just money.
Investments to focus on:
Health- Without your health, does it matter?
Education- The more you know and can implement the higher your income
Wellness- It’s not just about your physical health. What about your mental, social and financial health?
Freedom- We all want to be able to do what we want, when we want and how we want. You have to set yourself up to get there.
Relationships- Are you getting time with the people that you care about?
#2. Invest in a purpose
What’s the purpose of your investments? Is it for retirement? Is it for a new home? A purpose will guide your investments and financial decisions. It helps you keeping those investments and money decisions aligned with your goals and vision.
Without a purpose, it’s easy to drift away or make behavioral mistakes.
#3. Invest in a diversified portfolio, not just your employer
For those that have employer stock, I get it. It has probably done well (well maybe up until last year). It’s important to diversify your assets so that your entire financial world isn’t tied to one company.
For those that don’t have employer stock, it’s extremely difficult to know which company will do the best in any given year. By having a globally diversified portfolio it will allow you to capture returns in any given year rather than chasing or guessing.
#4. Invest in Real Estate
This is a very popular investing strategy. Many people like this strategy due to it’s:
Just remember that it is not purely passive. This is a common misunderstanding. It takes work to create passive cash flow. This is a business, and you should treat it as such.
#5. Invest in tax planning
Tax planning is a forward-looking activity and NOT a reactive one. This type of planning is often overlooked.
A good tax strategy will:
Reduce lifetime tax bill
Set up business structures (Real Estate)
Keep your investments organized and provide an annual long term strategy
As always, I hope this was helpful in helping you think more strategically around your money.