According to experts, the majority of working Americans are not saving enough to retire comfortably. As a matter of fact, they say it’s hard for us to even come up with $1,000 in the event of an emergency. If we can’t fund a short term emergency, then surely we are not going to be able to sustain a long retirement.
Here are THREE ways to grow your portfolio:
SAVE more! You’re probably not saving enough. A good rule of thumb is to save at least 10% of your income and work your way up to 15%. Ten percent may seem like a lot to start with especially if you have not been saving at all. I say start saving as much as you can, even if it’s 5%. When you get a raise, SAVE YOUR RAISE!
Don’t feed the flames of FEAR. In order for your money to grow, you have to INVEST in the Stock Market. The Stock Market by nature will have some volatility, however you have control over how much volatility your portfolio is exposed to. If you make consistent contributions, diversify your portfolio and take on some level of risk, your portfolio will grow over time.
MAX out your retirement account, don’t take AWAY. While you are working and accumulating assets, NEVER take distributions from your account. Trust me, you are doing yourself a disservice. You will pay taxes and most likely a penalty. It is a painful hit to your portfolio and ultimately your retirement. Even if you pay yourself back, the money you took out is not invested so it’s not getting the opportunity to grow.
By implementing any one of these tips, you will put yourself in a better position to retire. Implementing ALL three will significantly increase the probability of reaching your retirement goal.