There is a time to invest boldly and there is a time invest wisely in life. As your risk appetite reduces with age you move from bold high flying stock investments to more solid but far more expensive property investments. If you have been saving 5 per cent to 10 per cent of your monthly earnings in another account for 20 years, and investing them for twenty years as advised you would be a millionaire anyway.
If you can’t monitor regularly it is time to move out of stocks
As you enter the age of 45 you reach a stage in your career where you are super busy in your work as you have reached seniority. You lack time to look after your own stock investments as your profession has become extremely demanding. This is the time to sell out the flock that you cannot look after on a daily basis. Remember it is not wise to hold equities without tracking the market and its movements on a regular basis.
So what do you do with the cash liquidity once you offload your own stock investments? You can either pump for property that you can rent out or you can push for equity mutual funds or pension funds. This is the time of your life when your affordability has improved and you are more comfortable with a fair amount of cash surplus.
Equity Mutual funds are great investments when you are short of time
Now is the time to add solidity to your savings. Those that are coming with third party knowledge and assurance of being ‘near fail safe’ investments. ‘Near fail safe’ because other than secured bonds of Government and bank fixed deposits nothing really is 100 per cent fail safe. We are talking of equity mutual funds and pension funds. Those that have proven themselves consistently over the last decade as high return instruments. Those that have proven by their track record that they are trust worthy and near fail safe instruments.
If you check the market you will find that getting a 11 per cent plus dividend cheque each month is possible and some equity mutual funds. They have the track record to have consistently delivered such high yields over a long period of time. So you really do not have to monitor them day in and day out because a professional team is doing it for you.
All you need to do is make out an excel sheet and track your monthly dividend and keep a Google alert going to track all news pertaining to the mutual fund where you have invested. These two actions are enough for you to get the feedback of your investment and unless you find that the dividend rate has dropped by a percentage point you stay invested in that fund without batting an eyelid.
The age of 45 is also a great time to invest in pension funds. Chose with care because they are pretty confusing unless you know your objective. Remember pension plans are just your last guard in case you have exhausted your savings due to some emergency in life. Pension funds provide you with monthly payment at a time you need it most, so use it as your final saving corpus.
There are various type of pension funds, but be sure to check the track record of pension funds before you invest in them. At the age of 45 what you need is a short term pension fund that needs your investment for 10 to 15 years and gives you an assured retirement pension. So be sure to chose your plan to your pocket size ( check annual premium) years of service ( investing period) and retirement needs.