The tumbling stock market and troubling inflation levels might have those in Gen X and younger wondering if retirement can ever happen. But it can if you play your cards right and stay in the game for the long run. In this case, the game is investing.
For starters, max out on your IRAs and 401(k)s and leave them in stocks and funds with risk levels appropriate to the time you have until retirement. It’s conventional wisdom that stocks reward those who buy well and stick with it, and who don’t try to time the market.
The wisdom is right: From 1972 to 2021 the S&P 500 — which represents about 80% of the total market’s value — has provided an annualized return of 9.4%.
That’s still an inflation-beating number, and you can replicate that retirement-accelerating performance simply by buying one of those huge index funds and adding to it over the years.
You can also enjoy long-term gains that move you ever closer to affording retirement by investing in real estate in all its many forms. Indeed, there are a lot of ways to get involved in real estate investing. Let’s take a quick look at a few of them, with a longer look at my personal favorite: real estate investment trusts (REITs).
1. Directly own real estate, if you can and dare
Buying your own real estate, whether to manage the rentals or have someone else do it, or simply to hold short-term and fix and flip, can still provide a path to prosperity, as it has for generations.
However, this might be the most challenging way, since you need capital up front, management skills, and market savvy. I know plenty of folks who have all that, or enough of each to make a difference, and they’ve done fine. It’s a lot of work but certainly has been rewarding for them.
2. Real estate crowdfunding platforms
These operations offer you the ability to invest in individual properties across asset classes, especially multifamily, retail, and smaller logistics sites, and require minimum investments typically ranging from $5,000 on up.
Some also offer REITs that pay regular income, typically quarterly, but they all pool your money with others in exchange for access to owning a chunk of this real estate while it’s managed by the platform’s operators. They don’t have the kind of history, transparency, or liquidity that publicly traded equities do, but you certainly can grow your retirement nest egg through smart use of this still-emerging new option.
3. Real estate industry stocks
There are a fair number of companies deeply involved in providing real estate services, including …….