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5 long-term investments for a wealthy retirement! | Fool UK

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5 long-term investments for a wealthy retirement!
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The cost of a comfortable retirement is on the rise! As a result, many Brits are scrambling to top-up their pension funds and increase their monthly deposits. However, adding to your pension pot isn’t the only way that you could secure a comfortable retirement. Here are five long-term investments that could give you the financial freedom you want in retirement.

1. Real estate

Average house prices have risen by 78% since 2000! As a result, those who purchased properties 22 years ago will be sitting on a nice sum of money right now. Moreover, house price inflation is not expected to slow anytime soon, which means that you could still take advantage of real estate investments.

Owning your own home could help to fund your retirement. Downsizing in later life could free up money for care home facilities, travel or a more luxurious lifestyle.

While renting has grown in popularity due to the rising house prices in the UK, saving for your own home could put you in a better position in the future. Why not start by using our mortgage calculator to figure out what you can afford?

2. Passive income

Starting a passive income stream is an excellent way to invest in your future. While these income sources can take time to get going, passive income can significantly boost your retirement!

There are a number of passive income ventures available that require very little effort once set up. Therefore, by starting a passive income stream, you could easily generate extra income for your retirement!

You don’t have to be an apprentice-level entrepreneur to successfully create passive income. The best thing to do is to start small and gradually build your income over time. In 20 years, you could be making enough money to replace your monthly income!

3. Stocks and shares

Just like a property, the price of stocks and shares can significantly increase over time. You could use this to your advantage by buying stocks now and selling for a profit to fund your retirement. To get started, you’ll need a share dealing account. Why not take a look at our list of top-rated share dealing accounts to get started?

Of course, future market movement cannot be predicted. Therefore, it is always a good idea to seek professional advice before making any investment decisions regarding the stock market.

Alternatively, you could invest in a top-rated stocks and shares ISA, which will make all of the decisions for you! These ISAs use advanced analytic strategies to pick the best stocks and shares from the market and can produce excellent returns over time.

4. Dividend stocks

Making a profit through stock price inflation isn’t the only way to create wealth through the stock market. Investing in dividend stocks is also a great way to build a secondary income stream and fund your retirement.

Dividend stocks are stocks that make small payouts to shareholders quarterly or annually. The payouts represent a small fraction of the profits made by the company and are given to shareholders as an incentive to keep the stock.

Single dividend payments are typically small. However, by building up a portfolio of multiple dividend stocks, you could easily generate a regular income stream. For example, if, over time, you buy 100 shares of a stock that offers a £2 dividend per share, you will receive a £200 dividend payment.

A good idea is to use the dividend payment to buy more of the stock and build up your portfolio over time. During your retirement, dividends could provide you with some extra cash!

5. Collectables

When people think of investments, their mind usually goes straight to stocks or property. However, other items can gain value over time as well. In particular, collectables such as precious jewellery, antiques, cars and designer handbags can all increase in price.

The added value typically comes from consumer demand. So, rare or culturally significant items tend to increase in value over time. For example, unique £5 notes can sell for thousands on sites such as eBay!

Additionally, sought-after designer watches and handbags generally increase in value, which is reflected in the pre-owned market. Therefore, people who own designer items now may be able to sell them for a profit in the future. This could be an excellent excuse for a shopping spree!

Our top-rated Stocks and Shares ISAs for beginners

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Ready to get your money working harder? Let us help you find a Stocks and Shares ISA that’s a good fit for your investing needs.

Open your account before 5th April and you could shelter up to £20,000 from the Taxman, you won’t pay UK income tax or capital gains on any potential profits.

Investments involve various risks, and you may get back less than you put in. Tax benefits depend on individual circumstances and tax rules, which could change.

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