IRA Contributions For Tax Savings and Retirement Planning

WrittenBy:Donald Low
Investment is the key to becoming truly wealthy, yet so few people understand their investment alternatives. The majority of people hold mutual funds in their 401k or hold a portfolio ofsome blue chip stocks or even some corporate ormunicipal bonds.The beauty of investment is compound returns. If you earn are able to earna rate of return of 10% per year, you are expectedto double your money in just over 7 years. You could have 4 times as muchin 14 years or 8 times as much in 21 years. Think about saving for retirement or planning for your child's education.

However, it is possibleto earn much higher returns than 10% per year. By understanding some of the lesser known investment alternatives such as currencies, commodities, and real estate you can become wealthy while your neighbors are not. You don't need to own ahome or investment property to invest in real estate.By purchasing something called a Real Estate Investment Trust (REIT) you have all the benefits of real estate ownership, whether it be commercial orresidential. REITstrade on the major stock exchanges and publicly traded REITs have produced superior returns of over 14% per year when compared with stock indices over the last 20 years.

If you desire tobe a more activeinvestor and are willing to take on more risk to achieve higher returns,you can invest in futures or options. Futures and optionsmake use of leverage which allow you to control more of an underlying assetfor each dollar you commit for investment. For example, you can tradefutures on currencies or commodities and easily post returns of 50% or more. Trading stock options is a good way to handsomely profit froma big move in an individual stock or the market as a whole. Plus, when purchasing options your maximumloss is limited to your purchase price.