Knowing how to invest your income to grow your wealth is easier said than done. You may be comfortable with your current 401(k) investment plan that allows general investments in stocks, mutual funds and bonds. What you might not know is that you can take more control over you 401(k) investments and start earning much larger returns outside of standard investments. These markets are available to any 401(k) owner and allow you more opportunities to grow your wealth with your retirement account.
Standard 401(k) Investments
The entity that controls your investments is known as a custodian. Most custodians offer stocks, bonds, certificates of deposit, ETFs and other securities that may or may not grow your investment. There are no guarantees with investments unless they are FDIC insured. High yield savings accounts are one form of FDIC investments. You have the option of taking part in these standard 401(k) investments or making a change that will provide access to alternative investments.
Self-Directed 401(k) Investments
When a custodian manages your investments, you have no control over what happens daily in stock markets or other funds where your money is placed. Expert knowledge of these markets still offers no proven way to grow your invested savings. A self-directed 401(k) allows you better control over how your money is used. This account opens the door to additional investment opportunities that are not available with standard 401(k) accounts.
Self-Directed 401(k) Investments Include:
• Real Estate Rental Properties
• Tax Lien Certificates
• Business Franchises
• Treasuries
• Commercial Paper
• Domestic and Foreign Currencies
• Mortgages and Notes
• Equipment Leasing
• Accounts Receivable Factoring
• Personal or Business Loans
How to Earn the Highest Returns with Your 401(k)
Every investor shares one thing in common. The common element is risk taking. A standard 401(k) custodian may give you trends and market analysis information to review before investing, but the risk of losing an investment is never decreased. Many investors are searching for an overnight income stream. Real estate has proven to be a moneymaker that will grow at a steady pace. Unlike the stock market, you can get into real estate and get out if it is not for you and still recapture your investment. Researching your investment opportunities and knowing how to use your 401(k) or self-directed 401(k) will help you earn the highest returns.