As the end of the year approaches you may be thinking about your investments. If you’re like the people in the slick TV commercials who talk about “wealth management” while they cast their line in some Montana fly-fishing river, you can stop reading this article. I’m not going to tell you about the latest long-term commodities investments or such.
Rather, this article is primarily intended for people whose concept of “investment” is the paltry 401(k) they get from their non-Fortune 500 employer, or, better yet, Social Security.
Even people with tiny retirement funds sometimes have a few extra shekels to spend, and you don’t want to waste it, right? Here are five “investments” that might pay off better in the long run that blue chip stocks:
1. Home maintenance
Your house is your biggest investment, right? Well, if you’ve ever seen the phrase “as-is” in a real estate ad, you know the difference between selling a house that has been well kept and selling a house that is falling apart can be many tens of thousands of dollars.
I’m not talking major additions or new kitchens here – those are in a different investment category altogether – I’m just talking about smaller, but arguable more important, maintenance issues. The roof, for example. If your roof is leaking you may not want to shell out the several thousand dollars to have it re-roofed, but water damage will eat up the structure of your house faster than just about anything short of fire.
A good roof is essential, but even smaller items matter: keep your paint fresh, trim your shrubs, wash your windows regularly. All these little investments will pay off when you sell your house, and, perhaps more important, will make your house more enjoyable to live in right now.
2. Pre-paid tuition plan/education savings
This is not new advice, I realize, but I’m going to reiterate it because I wish I had truly believed it when my kids were little. Like many people in their 20s, when my kids were born I assumed my income was just going to keep going up and up every year, so when they reached college I could pay the bill with spare change.
Well, my income generally has gone up – though with many bumps along the way – but tuition has gone up much faster! So trust me when I say that putting away a little money each month towards tuition, either in a special account or a pre-paid tuition plan, will pay off in the long run.
3. Exercise equipment
Being fit helps in so many other parts of your life – including your profession – that anyone who cares about financial well-being should also care about health and fitness. I’m not going to bore you with the usual advice about 30-minute daily workouts, but believe me, being in shape may help you earn more money (healthy people get more work done and get hired faster) and save money (healthcare).
Obviously, you don’t need to actually buy exercise equipment – you might want to invest in a gym membership instead, or maybe just a pair of running shoes.
4. Property tax lawyer
Where we live, property taxes jump with each reassessment. We used to just groan and pay the bill, but one year I responded to a mailing we got from a tax lawyer who would file a property tax appeal for us, in exchange for some percentage of the savings. It worked!
So the next time we were reassessed, instead of hiring a lawyer, I went online and completed the forms myself. It was easy – the same website had a link to a database of comparable properties against which I could compare our taxes. And it worked again, except this time I didn’t have to pay the lawyer’s share.
OK, no investment adviser will ever tell you to invest in old baseball cards or art, but sometimes these investments do pay off. More important, however, is this fact: You will get more pleasure from buying antiques, old stamps, and other collectibles than you will get from any other investment.
Those stocks and bonds you hold might earn a better return, but if you invest in a hobby you like coin collecting, you’ll enjoy hours and hours of fun while possibly earning money.
No, this article didn’t settle your vexing investment questions, but hopefully it gave you a couple of ideas of how to wisely invest in the coming year.