Top Investment choices to Secure Your Assets – PillarWM
A robust investment portfolio can allow you to attain your long and short-term financial goals. For example, it can help you cover your kid’s college and tuition fees, repay your mortgage early, or establish a retirement savings fund. Investing in the right investment products can allow you to enjoy a high level of returns in the long run. However, the task of identifying the appropriate investment is really not that easy. So, if you are wondering, what are the top investment choices for me, then make sure you continue reading and get the answer to your question. One thing you absolutely need to keep in mind is that there is no such thing as the “best” investment. Read our in-depth guide for investors with $5+ million to invest by requesting it here.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
At Pillar Wealth Management, our team offers investment and portfolio management services to high net worth and ultra-high net worth individuals who have investable assets lying anywhere between $5 million and $500 million. Our services include asset allocation analysis, portfolio design, tracking and rebalancing investment portfolio, along with tax-loss harvesting. If you want to benefit from our investment management services, click here to sign up for a free meeting with the financial experts at Pillar Wealth Management.
Table of Contents
How Do Beginners Invest?
If you are an individual who is just starting out with investing, you might be thinking, how do beginners invest their wealth. If that’s the case, then here is some information on how beginners invest their wealth.
1. 401(k) or Other Employer Retirement Plan
If you have a 401(k) or any other employer retirement plan at work, it should be the first place where you should invest your money – especially if your employer matches a percentage of your contribution. The match is absolutely free and offers a guaranteed return on your investment.
You can contribute up to $19,500 to a 401(k) in 2020. However, that certainly doesn’t mean that you need to contribute this much. The best thing about investing in a 401(k) is that there is usually isn’t an investment minimum, but you should aim to contribute at least as much as your employer match.
2. Index Funds
Index funds track a market index, which is a collection of investments that represent the market. For instance, the Dow Jones Industrial Average is a market index that tracks the performance of 30 major publicly-owned companies trading on the New York Stock Exchange and NASDAQ in the United States.
Since index funds use a passive approach to investing by tracking a market index fund, they tend to have lower management fees than investments that use an active approach, such as mutual funds. For more information regarding the difference between active and passive investment approaches, read our ultimate guide here.
3. Exchange Traded Funds
Exchange-traded funds, commonly referred to as EFTs, work quite similarly to index funds. They take a passive investment approach and usually track a market index.
The key difference between index funds and ETFs is that instead of having a minimum investment requirement, ETFs are traded throughout the day, and you can purchase them for a share price, which can possibly fluctuate. The share price is basically the ETFs investment minimum, and depending on the fund, it can either lie below $100 or be higher than $300.
What Are the Top 10 Investments?
Another common question that people have regarding investing is where should I invest my money. Well, there are various investment options that you can opt for. These include low-risk options such as certificates of deposits and money market accounts to mid-risk options like corporate bonds, and even high-risk options such as stock index funds. The variety of investment options is great! It indicates that you can invest your wealth in various investments that offer a varying level of risk and are in line with your risk tolerance.
If you are a wealthy individual who wishes to grow your wealth, you can opt for a low-risk investment that offers moderate returns. On the other hand, you can opt for investments that carry a higher risk but provide higher returns too. Nevertheless, the best way to go is to use a balanced approach that effectively secures your existing wealth and offers room for growth in the long run. Want to know more about how you can successfully secure and grow your wealth? If yes, don’t forget to read our guide, Improving Portfolio Performance.
Here are some investment choices with varying returns and risk levels.
1. Real Estate
Real estate largely lies in two major categories – residential real estate and commercial real estate. It’s quite widely known that many affluent individuals consider real estate as an excellent investment option.
Investing in conventional real estate encompasses purchasing a property and selling it after some time at a higher price. It even includes owning a property and earning rent as a form of fixed income.
2. Private Equity
Many investors consider equity investments as a route to more lucrative options in the financial market. Private equity generally purchases entire companies instead of getting a partial equity interest.
3. Mutual Funds
A mutual fund pools cash from investors to buy stocks, bonds, or other assets. The benefit of investing in a mutual fund is that it helps you cost-effectively diversify your assets.
Mutual funds are a great investment option if you want to establish a retirement fund or aim to accomplish another long-term financial target. To know more about mutual funds and if they are a suitable investment option for you, sign up for a free meeting with our investment advisors.
4. Precious Metal Such as Gold
Precious metals like gold, silver, palladium, etc., have long been acknowledged as great investment options. Such precious metals have a very strong place in the investment portfolios of high net worth and ultra-high net worth even in the present day.
The best thing about your money in precious metals is that it allows you to hedge against inflation.
6. Growth Stocks
Buying and holding growth stocks is another great investment option for affluent individuals. Such growth stocks don’t pay dividends. However, they create returns through appreciation of share price. What this really means is that you won’t have to pay any taxes on the growth as it occurs.
7. Tax-Free Municipal Bonds
Tax-free municipal bonds are fixed-income investments generally issued by states, cities, and government agencies to finance projects.
You can purchase these bonds individually. However, if you seek to diversify, you can purchase funds that own a basket of them. One great thing about tax-free municipal bonds is that the interest on them is exempted from federal tax. Hence, they produce returns that are equal to or higher than taxable bonds of a similar kind.
Collectibles are things that have a value that’s much higher than their original selling price. They are regarded as alternative investments, which means they don’t lie under any other category, such as real estate, stocks, bonds, or cash.
Investing your money in collectibles is quite a rewarding experience and can help you increase your returns. Stamps, wine, classic cars, and fine art are some collectibles that you can opt for.
9. NASDAQ 100 Index Funds
An index fund based on the NASDAQ-100 is a common investment option for wealthy individuals who wish to get exposure to large tech firms. The fund is based on the NASDAQ 100 largest firms, which means they are the most prosperous and stable. These firms include Microsoft, Apple, Amazon, etc.
10. Cryptocurrency Such as Bitcoin
A cryptocurrency is a digital or virtual currency that uses cryptography that is almost impossible to forge because it’s highly secured.
Real assets or tangible securities do not back cryptocurrencies. These investments are traded between consenting individuals without the participation of any broker.
Why Should You Work with An Investment Firm?
Now that you know the top investment options to invest your money in, you might think that you can take up this task yourself. Unfortunately, that’s not true.
Investing is a task that requires comprehensive knowledge that goes way beyond simply knowing the right investment options. For instance, you need to know how much wealth you can invest in a particular investment product. You also need to know when you should invest in a certain product. All in all, investing your money is a task that requires a well-devised strategy. Read our hardcover book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates: Strategies for Families worth $25 Million to $500 Million, to learn more about why it’s essential to have the right strategy.
A credible and reliable investment firm will curate the best investment strategy for you that will help you attain your long and short-term financial goals. In fact, they will even offer you some additional benefits such as the ones highlighted below.
1. Relevant Experience
Investment firms work with all types of affluent clients with varying backgrounds and different financial goals. This gives them more experience with how to maximize investment returns, capitalize on investment opportunities, and reach one’s goals.
At Pillar Wealth Management, our team has over sixty years of joint experience in devising investment plans and formulating the most suitable portfolios. Plus, we have market data that goes back a hundred years that we use to test and rightly forecast the performance of investments to secure our client’s wealth and keep them financially secure. Schedule a consultation with us to learn more about it.
2. Tax Management
One important thing you need to keep in mind is that your investment choices directly influence your tax obligation. All the stocks that you have invested in might have created incredible returns over the year. However, they might have also led to huge tax liability.
An investment firm meticulously reviews each aspect of all investment choices, including how it will impact your taxes. Consequently, they might shift your investments across various products that lead to a reduced tax burden.
They can even use tax-loss harvesting strategies to effectively optimize your tax expenses.In case your investment advisor isn’t talking about cost-saving techniques such as these, you might be headed towards an unpredictable retirement. Read our comprehensive guide to learn other warning signs that your advisor may not be right for you.
How Do I Pick the Top Investment Firm?
This is one of the trickiest decisions you will have to take up. There are plenty of investment brokers and firms making all sorts of promises and claims to entice you. It might sound appealing, but the truth is that these financial companies offer standardized solutions to their clients without any regard for the significant factor.
Here is a list of factors you should check and base your decision on.
1. Active and Passive Investment Management
The investment approach a financial firm uses reveals a lot about their skills. Generally,most firms focus more on active investment management, which involves purchasing and selling numerous investments in the span of a year.
While active management can create high returns, it is accompanied by high transaction fees, high risks, and high taxes. Alternatively, passive investment managers develop a portfolio based on the market index and are more focused on long-term gains with lower risks. This leads to lower management fees and reduced tax liability.
At Pillar Wealth Management, our team knows how to balance the two investment approaches so that our clientele receives maximum returns with minimal costs. Don’t forget to read our guide to find out why this is important.
The top investment firm will focus on offering you a personalized experience. They will take into account your unique financial goals and other objectives in life to curate a customized investment plan. With such an investment strategy, you will not only get high returns but will also be able to accomplish your goals much more quickly.
Enlist Pillar Wealth Management Today
At Pillar Wealth Management, we provide a range of financial, investment, and advisory services to our valued clients. If you have liquid assets ranging between $5 million and $500 million and are searching for a competent investment partner, contact our team today!
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