4 Great Investment Ideas for Middle-Aged Entrepreneurs
Investing when you’re in your 40s and 50s is a bit trickier than when you start early; there is a reason for that. You have around 20 to 25 years to build a strong investment portfolio with a healthy return on investment, a shorter amount of time compared to when you start investing in your 20s. Depending on your retirement plans, this means pursuing a higher return over a shorter period of time.
Worry not, because you actually have more advantages as a middle-aged entrepreneur. You normally have more money to invest and a wider range of financing options to tap into. You also know more about the market and have better experience in general. Using these advantages, here are some of the best investment ideas you can consider.
#1. A Solid Retirement Plan with IRA and 401k
One of the first things you need to do when you’re just getting started with investments in your 40s is to focus on cash flow and retirement planning. The two most useful instruments to invest in are the 401k and IRA. There are plenty of programs to choose from too.
Investing in cash flow for retirement is a great foundation for a number of reasons. You can maintain a healthy lifestyle and keep up with your expenses as you enter retirement without having to eat into your savings or use funds that can be better allocated for other investments.
You can also do the things you have been wanting to do as you enter retirement. Do you want to travel with your spouse or start an entirely new business based on your hobbies? You can do so comfortably and still have healthy streams of income to rely on.
To be extra safe, you can also buy gold to protect your IRA against the marketing dropping. Gold maintains its value relatively well, even through tough times such as the 2008 crisis. Investing in gold can be the extra safety net you need.
#2. Hire an Investment Manager and Formulate a Strong Portfolio
If you’ve been saving a portion of your paycheck over the last 10 years, chances are you have enough to invest in the market. You may even have the skills, expertise and experience to invest too. That said, it is always best to work with an equally experienced investment manager for a few important reasons.
You can still start a business and explore other ventures while in your 40s. You may also have a fulltime job to keep along with other activities to keep up with. Although you know your way around the financial market and other investment opportunities, jumping into the market yourself isn’t always the best idea. You’ll end up not being able to maintain your investment portfolio due to the lack of focus and time.
Investing in the stock market for long-term gain can be done with the help of a reputable investment manager. You can focus on companies that show good mid- and long-term growth in order to limit the risks and still turn over a relatively high return on the investments. The stock market is relatively safe too – compared to foreign exchange, or options, for instance – and you can develop a strong portfolio in a shorter amount of time.
#3. Buy to Let and Property Investments
A lot of people choose to be more conservative when investing in their 40s and 50s; this is the right approach to take. With careful planning, you can have multiple streams of income and a steady growth in value on the property market.
There is no better time to invest in property than today. You have the market just picking up its pace after the crisis, so a lot of great properties are available for sale at great prices. You can expect the market to grow rapidly over the next several years too, making it a very good investment opportunity to benefit from.
On top of that, you can limit your annual investment costs by renting the properties out. Choose properties at great locations and you can match your current monthly salary – or even go over it – in rent and other sources of income.
If you want to be more involved with the investment, it is also possible to rent properties on a daily or weekly basis. Holiday rentals are big these days, especially with services like Agoda and Airbnb allowing property owners to reach tenants directly. The amount of money to be made from the investment is also inherently bigger with holiday rental services.
#4. Fund a Startup
This next investment idea requires a lot more research and involvement, but it is something worth doing. We’re seeing a huge rise in startups – especially tech-based companies just starting out with their next big things – these past couple of years. These startups are great investment opportunities.
There are two ways to approach investment opportunities too. You can join a venture capital or a funding company with your investment. The company will then filter startups and find the best opportunities to invest in. Your investment is converted into ownership – in the form of stocks – and you can enjoy a healthy growth in value.
Alternatively, you can be an angel investor yourself. This means spending more time to get involved in the startup and making sure the company is run properly. It also means spending energy to make the startup work and to boost its value. When you do hit the valuation mark or the startup turns over a profit, however, you will get a very healthy return on that initial investment.
When investing in your 40s and 50s, retirement and safety should be your primary focuses. Once you have these aspects covered, however, you can use the tips and ideas we covered in this article to expand the reach of your investment and increase your overall ROI.
You can even choose to start your own business – based on your hobby or passion, for instance – and turn it into a big company that produces revenue and creates more opportunities. It all starts with that one initial investment, so start today, take the first step and build a strong investment portfolio for yourself.
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