The most difficult part of saving for retirement is the “saving” part. The word “saving” reminds us of locking something away in a vault for a very long time – until the proverbial rainy day comes and we have to take it out and use it.
During WWII Russian scientists who were protecting a seed vault from bombardment died of starvation at their posts. They were surrounded by bags of rare rice seeds and potatoes. Although what they did was noble and saved rare genetic material for the rest of humanity, this is not the way we want to think about saving for retirement.
Most Millenials are so far behind the savings curve that let’s face it – we won’t save for retirement even if we put away half of what we earn right now into a savings account and never touch it.
The best way to save is to invest. But with most of us remembering our parent’s 401Ks being wiped out, investing in a retirement fund only seems like a risky endeavour. If we change the way we think about investing, we might even have fun doing it!
The most “fun” way to invest is to put money into something we can use right now. This might be a house – yes, the best way to invest is still in property or home. When you retire, you can either sell your investment or get money from it by renting or equity release – how much can you get? You can either project what you can expect to charge for rent or use this handy equity release calculator.
Another way to invest in something that you really like – like a friend’s firm or startup. This is a great way to spend your money because you are actually putting it where your mouth is and supporting something that you believe in.
If you are thinking about lending in order to invest, consider microloans too. Microloan companies or peer-to-peer lending companies are becoming more and more popular. LendingClub, Peerform or Kiva for charitable investments. You can invest for your retirement and help someone in the process. Talk about feeling good!