One of the best ways to prepare for retirement is to save money and invest it wisely. But people don’t do that anymore as personal debt is near an all time high. How can you invest money when you don’t have any? That is a BIG problem for too many Americans.
There is another problem as well: interest rates are under 1% and that in itself discourages saving. Why bother to save when there is little incentive to? And what happens to all the retirees or near retirees that rely on interest income to live? Remember, Social Security doesn’t pay enough to have more than a basic existence in today’s economy. People need another source of income.
Those who do have money to invest have put it in the stock market the last five years and stocks are near an all time high as a result. Investing in stocks is the best way to make money if you have a long time horizon to work with. But that is the key: a long time horizon.
If you are a youngster just out of college or just starting your working career, putting aside money to invest in stocks is one of the best things you can do. If you start buying stocks early in life, you have time on your side and time to wait through all the dips the market may go through. No need to panic like some investors do if you are content and patient enough to wait things out.
Unfortunately though, with the “I’ve got to have things now” mentality we have in our society, too few people ever get started in the right direction and they choose debt instead. Debt is a killer that should be avoided at all costs but since everyone else is doing it, it now seems normal. What a shame.