Aug 16

Five ways to prepare for your future while still in your forties

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Young people can afford to live like there is no tomorrow, but people over 40 tend to be more concerned about their long-term prospects. This is a good time to start thinking ahead and preparing a financial strategy resistant to any type of surprise. At this age, you can’t take good health and sustained performance for granted, and it makes sense to have a fallback plan to counter such uncertainty. Either through direct savings or business investments of life insurance, over-40 individuals need to have a source of relief if things suddenly take a turn for worse.

Let’s discuss pros and cons of the various options for securing your future:


1. Savings account

This is the most obvious option and one of the safest methods for improving financial security – albeit one that requires a lot of patience and self-restraint. Putting some money into your savings account year after year will eventually allow you to accumulate a nice sum that can see you through a rough period or provide a stash to draw from after retirement. While the interest rates on short-term savings are usually low, this mode of investment comes with practically zero risk.


2. Life insurance

As another popular option for accumulating significant funds, life insurance tends to be more favorable than it seems for this demographic category. There are providers specialized for life insurance over 40 policies, and some of their packages are very affordable and attractive. An insurance policy is a way to put some money aside while protecting your family in case something tragic happens, and it can be structured in such a way to allow early withdrawals under certain circumstances.


3. Investing in the stock market

Once regarded as a default channel for diverting your surplus money, the stock exchange can still yield quite solid results if you know what you are doing. If you make very safe investments (i.e. government bonds or stock of large corporations), you probably won’t get rich overnight but you are highly unlikely to go broke either. On the other hand, targeting a high-profile startup during its IPO can be a good strategy if you are aiming a little higher.


4. Investing in cryptocurrency

Bitcoin, Ethereum, and other digital currencies are increasingly viewed as tradable commodities, and as they gain mainstream acceptance they are likely to gain value. While this can be a risky endeavor if you intend to buy and sell within a short period, long-term predictions for the cryptocurrency market are looking much brighter. However, you need quite a bit of knowledge to select which currencies to support, so it may be best to start small and expand your investment depending on results.


5. Buying real estate

This may be an old-school way to stabilize and increase your net worth, but it’s growing even more effective in a marketplace in which the demand for premium properties greatly outpaces supply. This is especially true in large cities – downtown properties in London, Berlin, or New York can only become more expensive in a decade or two. If you ever become hard-pressed for cash, you can always rent the property or obtain a mortgage.


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I’ll stick with my conventional saving account.

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