Top 3 Investments for Early Retirement

As we see an all time high in the stock market with stocks like Apple reaching new price records, one question lingers in the back of every investor’s mind, “What’s going to happen to my money when the market goes back down?”

Everyone with a 401k or a retirement account knows that in the blink of an eye your portfolio can go from “private yacht” to “pizza for two!” So what investments can you put your hard earned money in to protect your retirement, your children’s inheritance, or your college fund?
We are going to show you the top three safest investments of 2017. (And one of them offers better returns than risky investing too!)

#1 Government Bonds

There are two different kinds of bonds: Government and Corporate bonds. Buying a bond is like giving good ol’ Uncle Sam a loan from you to him. Both kinds of bonds when purchased promise to pay face value of the bond (what the bond says its worth) on a specific date that is predetermined, while paying a set interest rate along the way.

​​Bonds usually pay out twice a year to add to your returns, and the country that issues them usually manages them in their own currency. In the United States, the most common bonds are Series EE Bonds. They are a type of savings bond purchased at discount of their face value and accrue a fixed interest rate monthly from the time they are issued. Series EE Bonds mature after 20 years, and the US Treasury guarantees that investors will double their initial investment.

#2 Solar Panels

*BEST IN LIST

Depending on where you live (sorry cave dwellers…) solar panels can be a great option for you to have a great return in an investment that is safe from all the downfalls of the economy. For the United States, there is a 30% Federal Tax Incentive to maximize your investment. What?!?! You mean that Uncle Sam will cover almost ONE THIRD of what it costs to invest my own money? The answer: Yes.

Solar panels provide a typical return of doubling your money for people with little incentives, and for people who live in states like Minnesota, they see typical returns of tripling their money within 25 years. States with Net Metering laws (see blue and tan states in picture) have policies in place that force utilities to pay their retail price for overproduced electricity from solar panel investors, giving you and I the chance to own our own small utility company and make a healthy profit. (See Frequently Asked Questions about solar investments here: http://talksolarenergy.com )
Part of what makes solar panels such a safe investment is that they are not effected by the lows of the market, but they benefit from the highs! The price of electricity has historically never gone down since it’s invention, and the price for power goes up by almost 4% a year in some regions. Every time the price for energy goes up, solar panels owners make even more money.

#3 Savings Account

Any hometown bank offers savings accounts to their customers, and even though interest rates fluctuate, your principal balance that you invested will never go away. Returns vary from one institution to the next, and annual interest rates range from 0.01% a year (doubles in 7,200 years… thats a whole new meaning for investing for the LONG term!) up to 1% (doubles in 72 years) with an average interest rate of 0.06% (doubles in 1,200 years).

The biggest contributing factor to savings accounts being on our list for safest investments is because of the FDIC, or Federal Deposit Insurance Corporation. The FDIC was created in 1933 to promote and insure deposits to US banks. The FDIC is what protects your investment from bank failure, so even if the bank you have your investment in goes out of business, your money is insured up to a certain amount (typically $250,000).

BEST INVESTMENT STRATEGY: Use a combination of all three

The best and safest investment strategy is to use a combination of all three of these tactics to preserve and grow your portfolio. Here is the suggested formula:
When you are first starting out and building your nest egg, use the savings account investment, as it is liquid enough that you can take it out whenever you need it and it will still gain some interest.

When you have saved enough capital to make a down payment for a loan (or even better pay in full) invest into a solar panel system that produces enough electricity and profit to cover your electric bill twice. So if you pay $200 a month for your energy bill, invest in a solar panel system that produces enough to make your monthly bill $0 and puts $200 into your pocket each month. (Service that provides free system size consultations: http://talksolarenergy.com/contact .)

While you own the solar panel system, take the extra profit that the system is generating for you and purchase federal government bonds. Use the returns from your solar panels and bonds as your retirement income and when your bonds reach their maturity date, use the capital to enjoy the fruits of your smart and safe investing. 

If you enjoyed this article, please send me an email at [email protected] to let me know what you thought! If you like learning about business and investing watch some of my videos on YouTube here: https://www.youtube.com/c/dickpolipnick

Thanks for reading! Happy investing!
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