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Plan Your Retirement With ETFs

Do You Want to be Financially Independent?

 

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There are a few ways to achieve your financial goals whether for retirement or financial independence.

One thing you don’t want to do is ignore different investment ideas because these ideas can actually align with your ultimate financial goals.

The general purpose of retirement planning & investing is to acquire as many appreciating assets as possible

The optimistic financial analyst might say there is no wrong way to invest your money if you are in the game. However, there are investment options that may be more suitable for your current financial capacity or long-term objectives.

 

ETFs Are Fantastic For Your Portfolio

For the everyday worker looking to invest, exchange traded funds (ETFs) are a great investment vehicle to choose to gain a similar ownership of great stocks as mutual funds offer.

Even if you fear the stock market, there are ETFs that are constructed specifically for bonds investments.

Keeping it simple has always proven itself as an ideal investment strategy for many successful investors. It is all about maximizing the opportunities to build your wealth. 

While retirement planning aims towards a tangible asset portfolio accumulation to live off of, financial independence is the outcome everyone should desire to reach.

There are few better feelings than knowing you are financially secure, no matter what events occur in your lifetime.

 

“Old School” Wealth Building Techniques 

Times Have Changed. So Should Investing "Rules"

Times Have Changed. So Should Investing “Rules”

Historically, the common worker was told to put their money into a pension and do not touch it until they have retired.  Some people were fortunate to have their company match contributions dollar for dollar.

Once financial professionals saw the everyday worker putting their money into single stocks, they told them to “leave it to the professionals” and put their cash into mutual funds.

Professionally managed mutual funds are sound investment options, but they do come with substantial fees.

This is why the rise of ETFs have made remarkable noise in the markets.

 

Skip The Stocks.  Use The ETF.

Investing in ETFs is like individual stocks in that the funds can be purchased or sold on a national exchange at any point during the trading day. For this reason, there is only the initial transaction fee to acquire the ETF.

Instead of buying stock in Amazon.com, Home Depot, Walt Disney, McDonald’s, and Starbucks individually, you can simply buy the SPDR Consumer Discretionary ETF (symbol: XLY) and benefit from the appreciation of all these top companies for a fraction of the costs.

XLY

SPDR Consumer Discretionary ETF

The expansion of ETFs has been a winner for the middle class investor. High asset level mutual funds seek high net worth individuals to invest within their fund simply to earn a higher management fee based on the fund’s recurring fee percentage.

ETFs have risen as a great source for low-cost diverse investment options – you are not limited to those that track stocks.

  • Bonds
  • Cash
  • Currencies
  • Commodities
  • Any asset class

 A mixture of assets is never a bad approach to investing, as the level of risk taken on is moderate.

You must never forget that disciplined risk is very important on the course towards accumulating the wealth you need to reach your retirement goals. Exchange traded funds have provided many individuals with the reduced risk level they certainly require.

The purpose of ETFs is to invest in a basket of similar focused assets to reach a common goal.

Isn’t this the same for your retirement goals and financial independence? A cohesive investment strategy implemented with stepping stones towards retirement puts you on the right track.

 

Be Your Own Portfolio Manager

There are many ways of constructing an outstanding investment portfolio with the help of ETFs.  One can seek a specific sector, industry, product, or a broad market fund.

Broad sector specific areas could be technology or financials.

Industry specific could be telecommunication or large national banks.

You may find investing in an industry or sector you are immensely knowledgeable in to be more successful. For example, a physician most likely would have an upper hand on the healthcare sector than a software engineer would.

If you are not educated in one particular sector or industry, that is absolutely fine. This is why the overall market index can be an option to invest in.

With the S&P 500 ETF you are investing in the success of 500 of the top businesses in America. Historically, that is yet to be proven as a faulty investment when held for long periods, such as retirement plans.

iShares Core S&P 500 ETF

iShares Core S&P 500 ETF

Either way can be a productive portfolio to select. Going too specific may increase risk as that product or service could only be performing well within one or two companies, while others struggle, resulting in a negative or moderate gain.

A great series of sector specific ETFs are the select SPDR ETFs. They compile the top companies within each sector, and then create a weighted value for each stock’s holding percentage of the overall ETF.

The stronger the company, the higher their holding stake will be.

These ETFs have proven as successful investments over their period of existence.

These are not the only ETFs available; however, their performance over the years has demonstrated the value they can provide to investors of any capital level looking to obtain financial independence.

 

Your Financial Goals Are Attainable

You and I are no different. We want to accumulate enough money to retire at a reasonable age.

Some people want more money, some want to retire financially independent. Regardless of either desire, it is going to take investing in various forms to reach that point.

It does not matter which ETF investment tool you use, it matters how well those assets you choose are growing. 

It is better to be patient and methodical throughout your investment journey, than it is to just pour loads of money into any investment.

ETFs will give you the ability to reach your goals, but there are no guarantees in any market. It may be helpful to remember to stick with the investments that fit your risk tolerance and objectives.

Reaching your retirement goal is a process, so smart investing every step is the key.

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