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Investing after 50 with minimum money

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Investing at an older age around 50 and above will come with a set of challenges. A 20s young chap will benefit the most as he have several decades to wait for his investment to increase over time. But at older age, there is shorter time to wait through. One needs to know the priority in his financial planning.

Bonds over Stocks

It is good to choose buying bonds over stocks. This is because stocks holds much higher risk and not everyone can take it. You may lose money when the stocks went down. This is not the risk that an elder should take. Instead, bond provides a much safer way to gain more money though the gain is slow. But at least you still get more than you invest which is crucial for shorter term investment.

We need to set personal goals for our financial planning. If you plan to retire in your 50s, you may end up not working for almost the same number of decades as you are working, which could significantly eat up your savings. By setting this goal, you can more easily conclude what type of investment you need. Actually before you turn 50 years old, you should have on average 60% invest in stocks. As you grow older, your stock percentage should decreases over time. The scary thing about stock is, they can went down as much as 45%. So you need to be able to stomach this.

Please remember you still need some cash for emergency, so don’t invest almost 100% of your money.

Limited money

If one have almost unlimited cash flow, it will be so much easier for him to make investment. However with limited money, one need to be cautious of where to invest. You should not wait until you have hundreds of thousands dollars but to start it now. You need to start having compound interest doing the work for you. But before that, it will be good to pay off high interest debt first if any. This will help you do gather as much money as possible without debt eating into your savings. Also, fractional share trading is another method to explore. Spread it out to diversify it to reduce risk.

You may consider whatever small amount that you want to set aside to save. It will accumulate into bigger amount which is ideal for investment. You may also want to consider how much risk you want to take to make investment. If you are able, you can seek professional investment experts who can guide to better investment.

What to invest

Real estate investment trust (REITs) only requires you to own part of a property. Its flexibility allows you to only fork out a little money to be involve with it. Exchange traded funds (ETF) is another option that can use only little money to invest.