The New Year usually comes with a set of resolutions and things to tick off your to-do lists, but when it’s a new decade, the excitement to do better things is even higher. Looking back, it may seem like the last decade went by very quickly but, in reality, there is a lot that has happened in the last ten years and a lot is expected to change in the coming years as well. Some people may retire by the end of the next decade, some may have just begun their careers and may be on the brink of getting married or buying a house in 2030. Starting 2020 with the right planning and strategy can help you secure yourself financially not just for the decade but also for life.
1. New kinds of assets and products: Experts suggest that climate change will have a huge impact on the world economy in the coming years and affect the lifestyles of people around the globe. Electric cars are likely to see a rise in sales with an expected growth of $151.5 billion by 2024. Single use plastics, diesel and petrol cars, etc. may go through losses with a decline in demand. These predictions are not just helpful in deciding on what assets one should buy but can also indicate how stocks of such companies could function in the long run.
2. Rise of artificial intelligence: There can be a considerable increase in human dependence on technology and artificial intelligence. Although this can reduce the prices of commodities and services by cutting labor costs, but this can also cause many people to lose their jobs and increase unemployment and ultimately affect the economy. Another thing to note is that stocks of AI companies are likely to perform better at the market if their demand increases.
3. Recession: The United States was largely unaffected by the global recession of 2009. However, experts suggest that the US economy is in its last stage of the economic cycle and may hit recession in the following decade.
1. Start saving: If you have not been down the savings route yet, now is the time to start. Every New Year takes you a step closer to your retirement. An effective way to start is by setting a goal for 2030. For example, if you wish to save up $30,000 dollars by 2030, you must save at least $3000 every year. Keeping a goal will help you stay on the right track. It will also motivate you to reduce your expenses in order to achieve your goal.
2. Invest in a retirement plan: Go beyond the traditional employer provided pension account and invest outside of your job as well. If you change jobs within the decade, quit, or lose your job for any reason, you may lose out on the benefits of the employer plan. You can consider other retirement accounts like Roth IRAs for their tax-free withdrawals.
3. Find ways to increase your income: Try to make efforts to grow in your career through the decade. With a rise in the demand for AI and the possibility of recession, you should try to find ways to make yourself indispensable in your job. Learning new add on skills can help your productivity. You should also look at other avenues of income like starting your own business in an upcoming field, or turning a hobby into a secondary source of income with the help of the internet.
4. Make an estate plan: You are likely to have major personal changes in the next decade. If you get married, divorced or widowed, or if you have children or grandchildren, you must have an estate plan that incorporates any such major change in your personal life. Your assets could also increase over the next decade. If you do not have an estate plan yet, make sure to make one during the decade, if you already have one, you may have to update it along the way.
5. Take note of the right stocks: Apple had released its first iPhone back in 2007. The people who were able to take note of the brand’s vision and decided to invest in the company’s stocks back then must have made substantial profits over the years. The world is advancing in new technologies and startups more than ever before. So many ventures like Uber, WhatsApp, Instagram, Netflix, etc., have all become major successes over the last decade. If we look at the current global trends, the environmental crisis is giving rise to many ethical businesses and brands. Ventures like Beyond Meat, etc. have garnered a lot of popularity. Make sure to keep yourself up to date with the latest trends and invest in stocks that have the potential to grow over the years.
Every New Year is one less year you have to plan for retirement. So, it is better to start planning and implementing your financial strategies as early as you can. However, you must also understand the fact that the world is on the verge of change, with many major environmental, social, and economic shifts likely to take place in the coming decade. The only way to benefit from this wave of change is by keeping yourself well acquainted with all of these advances.
Consulting a professional can help you set yourself in the right direction from the beginning of the decade. Reach out to financial advisors for help on retirement planning for the 2020s.
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