Setting out on a long term saving plan is a unique kind of adventure. With long term savings, you'll want to plan for eventual gains and yields that will help you beat inflation and grow money over time. You'll also want to plan for consistency and a reliable result. Here are some ways to boost the success of your long term savings plan.
1. Look at IRAs and 401k Options
If your employer offers a 401k or matching funds option, this can be a
perfect way to set up long term savings. You can even get some of these
deposits automated to make saving even easier. For those who don't have
access to a 401k, an IRA or individual retirement account can be a way
to save bigger retirement tax-deferred investment into an account that
will include limitations on withdrawals.
2. Set Savings Goals
No matter what kind of long term savings plan you're setting up,
having eventual goals is important. Whether you're considering long term
investment to try for gains, or a stable, simple option that will be
there years down the road, look at what you can consistently deposit and
how you will keep that money safe.
3. Look for Good High Interest, Low-fee Savings Accounts
When you're setting up an account to hold your savings, you'll want
something offers an ongoing high interest rate, so that your money grows
at a certain rate. You'll also want to avoid accounts where some of
your savings is chipped away in the form of bank fees. Ask the bank
about how teller visits, balance requirements or other aspects of your
account may be vulnerable to fees, and look around for the best interest
rates for your long term deposits.
4. Think about Real Estate
A huge community of long term savers put their money into real
estate. That's because the rising prices of properties over time help to
handle inflation, when the dollars you deposited in years past end up
getting less valuable due to rising costs of living, currency
devaluation or other long term factors.
5. Make a Commodity Play
Some idealistic savers want to make their savings into something else
besides dollars. For some who aren't connected to the general financial
market, that might mean buying gold bullion and storing it in a safe
deposit box, but that's not the only option for investors in today's
modern financial world. Products like commodity ETFs allow you to invest
in a basket of commodity-based securities that, with proper
administration, should go up in value as those commodities get more
valuable. Unlike more traditional products, ETFs can also be bought and
sold during trading days over online brokerage accounts.
6. Look at Conventional Accounts vs. Money Market Accounts
Money market accounts are a new way for banks to offer slightly higher interest rates to savers. The only condition on these accounts is that they are vulnerable to some kinds of theoretical loss in extreme market conditions. Ask your bank about how the FDIC treats your particular savings accounts in order to know whether your money will be safe in market crash scenarios.
Think about all of the above when you're setting up your long term savings plan for building up an emergency fund that will be there for you later in life.