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Finance & Accounting
Pages 4 (1004 words)
Americans work hard all their lives to support their families. The cost of living in the United States has been steadily climbing for years. It is important for people to put money aside in order to accumulate wealth for retirement. In the past people relied a lot on social security benefits as their main source of income for retirement age.
The purpose of this paper is to discuss the different investment alternatives that I can use to develop a solid retirement plan. The biggest investment that people have is their homes. Despite the falling real estate market that occurred as a consequence of the recession of 2008 homes historically gain a lot of value over time. In 2012 the value of homes in America rose by 5.9% (Humphries, 2013). Buying a home is the first step towards financial independence. People that pay rent are throwing their money in the trash. An advantage of purchasing a home is that the interests from the mortgage on your first home are tax deductible. A good way to create wealth is by purchasing additional homes for rental. The rent typically pays for the majority of the mortgage. Upon retirement age a person can sell their second house to obtain a large sum of money. One of the best places for people to invest money towards their retirement is the stock market. The biggest stock exchange in the world is the New York Stock Exchange (NYSE). The most common investment instruments sold in the stock market are common stocks. A common stock is a security that represents ownership in a corporation (Investopedia, 2013). Owners of common stocks have voting rights. ...
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