Part of being a good man (and a good parent) is to recognize your family must be provided for, even if you’re no longer around to do it. It’s an uncomfortable topic, to be sure, and not one that anyone is in a rush to talk about. Nevertheless, every day that you wait to make plans increases the risk that your family will end up in a difficult situation.
You may be thinking you’ve already taken care of things with a variety of financial products like life insurance policies and other survivor benefits, but that may not be enough. Consider that insurance industry insiders admit that an average of only 1% of term life policies ever pays out. In addition to the low payout rate, the benefits themselves may not carry your family very far into the future, if they’re even claimed. That means you need to execute a strategy that will provide a lasting income for your family for years to come through strategic investments and some forward thinking.
Build a Stable Base
The first thing you’ll want to avoid when devising an income-producing investment strategy to protect your family is undue risk. In this case, boring and predictable is good. To ground your investment portfolio in solid performing assets, start with bonds. This can be done in a variety of ways, through publically issued bonds, corporate bonds, or bond funds. You’ll want your total investment in bonds to stay at a rate that matches your age, relative to other investments. This is because as you get older, it’s important to work to minimize risk.
Dividends are Key
Once you’ve built a solid foundation for your investment portfolio, it’s time to branch out with investments that have higher returns. Investing in companies that pay dividends are an excellent way to accomplish this. Pursuing this strategy means a steady source of passive income you can re-invest as the years go on, thus guaranteeing an evergreen source of funds for your family to draw upon. If you’re investing on your own, but are willing to put in a little extra effort, you may also consider closed-end funds. They carry a higher risk than individual stock investments but often outperform the returns of the broader market.
Finding Future Growth
After the bulk of your income-generating investments have been decided upon, it’s time to get creative. To make sure your investment portfolio will continue to grow for years to come, you need to do a little bit of fortune-telling. That means investing in emerging markets. Consider technology companies in places like China. Their massive population and relatively closed market mean growth is all but inevitable.
The leading E-commerce agency in China is QPSoftware, and they’re seeing a surge in new businesses targeting the lucrative Chinese market. Founder Quentin Pignard says that “With a growing middle class of over 300 million consumers, China is a growth engine that won’t stall out anytime soon.” From established players like Alibaba and Tencent to rising stars like DiDi, investing now could guarantee a healthy financial future for your family for generations.
A Small Price to Pay
Taking the time to map out a solid investment strategy to guarantee stability for your family is not only the right thing to do, it’s an act of love. The sooner that you take action, the better the long-term results will be. Also, if you find that you’re adept at investing, you may substantially improve your standard of living now while sacrificing nothing in terms of future security. That will really make you the hero that your family already knows that you are and that they need you to be.
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