As you enter your 50s and creep closer to retirement, now’s the time to start thinking about how to make more money to fund your goals, whether that’s paying off all debts as your career winds down, traveling constantly once you stop working, buying a vacation home or putting aside money for the grandkids.
With all of the skills you’ve learned, or the assets you’ve accumulated through your career, it’s time to put them to work in 2023 to secure your financial future.
Adding wealth in your 50s can’t be achieved by driving a rideshare car a few nights a week or selling the designer clothes you don’t wear anymore. Instead, tap into your knowledge base or your savings to make a real difference in your bottom line in the next few years. Here are six ideas to consider if you really want to grow your wealth.
Become an Executive Career Coach
Leveraging your corporate experience and coaching other executives is a great way to add income in your 50s, said Adam Garcia, the founder of The Stock Dork, a financial literacy platform.
“With your decades of experience working in a company, startups and other growing businesses will likely form a partnership with you,” Garcia said. “Your advice will become their guide when managing their operations and resolving potential corporate setbacks.
“You can find high-paying clients through referrals or by engaging in online communities like LinkedIn. The pay is pretty lucrative, as you can charge at least $150 per hour for your expertise, which may go up to over $500 an hour, depending on the industry. However, if looking for clients is time-consuming, you can seek out agencies that can connect you with a pool of business owners looking for an executive coach.”
Don’t Forget Roth IRA Contributions
“When you are over 50, your annual Roth IRA contribution limit increases by $1,000. For 2023, the Roth IRA limit is increasing to $7,500 for over-50s,” said James Beckett, a writer for TinyHigh.com. “Make use of this allowance; it is a gift. Your returns will grow tax free.
“It may feel like it’s too late to start investing or that your investment may not grow enough to be worthwhile. But that’s far from true. To illustrate, we looked at how much a 50-year-old would have by the time they are 65 if they invested the full $7,500 a year and received a 10% average return. Our investment return calculator shows that they would have invested $112,500 and have made $134,000 in interest alone, leaving you with a cool quarter million dollars for your retirement.”
Get Creative in Real Estate Investing
Jon Sterling interviewed plenty of people in their 50s when researching his book, “Set It On Fire: A Modern Playbook For Financial Independence & Retiring Early.” One of the nuggets of advice he got was to buy rental property. And you might need to go outside your normal boundaries.
“Many people live in metro areas where real estate is very expensive, so the idea of buying a rental property is out of the question,” Sterling said. “However, those same people can often buy nice rental properties if they look in other areas of the country. Property managers handle all the maintenance work and rent collection, so all they need to do is sit and wait for the checks to be deposited.
“Having one paid-off property by the time they hit the traditional retirement age can make a big difference in retirement. Of course, they don’t have to stop at just one, but one is a good start.”
You still can make money even if you can’t afford a huge property, said AJ Ruffin, owner and financial advisor at Jefferson Matthews Wealth Solutions in Hoover, Ala.
“If you’re considering real estate as a way to make extra money, remember that it’s OK to start small,” Ruffin said. “Some people want to wait until they have enough money to buy a large, expensive rental property, and then end up never investing because saving that much money is difficult. By starting smaller, perhaps with an inexpensive house that needs a few repairs, you can start earning rental income even though you can’t yet afford the rental property of your dreams.”
Create a Passive Income Stream
One of the best ways to make passive income is to create an online course. Throughout your career, you’ve undoubtedly developed skills and knowledge people would like to tap without bringing a consultant on board. You create the online course once and sell it to as many takers as you have.
Or, look around at what you have that you aren’t using but others would like to for an hour, a day or longer.
“Think outside the box. If you own land, consider leasing it out for farming or hunting,” Ruffin said. “It’s a good way to make passive income on property you already own.
“One passive income stream I’ve developed is special-occasion rentals. I rent a horse and carriage to people for weddings and other events. Such ventures aren’t for everyone, but if you already own something that can make money when you aren’t using it, it can be a good way to pad your retirement savings.”
Microlenders issue smaller loans, usually no more than $50,000, to small businesses that don’t qualify for traditional loans.
“Consider taking the extra cash you have around and becoming a microlender,” said Nathan Mueller, a licensed financial advisor and a financial coach who founded BlackBird Finance. “Being a lender, you provide small loans to people of varying credit ratings. (After) deciding what level of risk you are comfortable with, third-party companies will manage the loan, meaning that there isn’t as much upkeep as a house and the amount of money you lend out is more flexible than a down payment.”
Protect Your Wealth
You’ve worked hard to build your financial safety net and, in your 50s, you must make sure it continues to work for you.
“Building wealth typically involves one or all of the following: very high earned income, a successful business and smart investment returns,” said Paul LaPiana, a certified financial planner and head of product with MassMutual. “Building wealth also demands that you address the myriad risks that can sabotage value over a long period. Wealth protection — protection from economic downturns, mismanagement, poor allocations, premature death, litigation, etc. — distinguishes those who build wealth from those who will not pass wealth on.
“It is the combination of disciplined capital deployment and risk management that allows wealth to grow for decades,” LaPiana said. “If you look behind the curtain in families of generational wealth, you will usually find a cadre of advisors — a private client group, investment house or other financial services group — who help guide the family over the long-time horizon and a combination of investments and risk management products that help to realize the family’s very long-term vision.”
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This article originally appeared on GOBankingRates.com: 6 Ways for People in Their 50s To Get Rich in 2023