Invest in stocks that pay dividends. (blue chips) Then let those dividends reinvest themselves. With continued investment, not only will you be able to retire... but you can live off the dividends during your retirement and not eat away at a giant pile that will ultimately run out.
You can register with sites like sharebuilder and purchase shares quite easily. I like to look at the big index funds out there and see where their investments are.
(An index fund is just that, and Index of Stocks owned within a single portfolio. So many people put their money together and invest in the index fund. However, you wont get dividends the same way you would if you bought the stocks outright on your own)
For example, my 401k at work is maintained through Vanguard. They have many index funds:
https://institutiona...ews?cl=00000103
A portion of my 401k uses the 2030 Target Retirement Fund VTHRX, which has yielded about 18%. Realize the earlier you retire, the lower your return rate will be... but the risk goes down. If you are planning to retire much later (2060), you can invest in a fund that has a higher risk, but greater returns. Just remember as you get older, to migrate your investments into lower risk holdings... so you dont starve to death if an entire sector suffers for a few years. That's another point, diversify investments... don't put everything in Apple.
If you look at the underlying funds in the index fund portfolio you will find: https://institutiona...ils?fundId=0695, that 54% of that fund is their "Total Stock Market Index", look at the Portfolio for that: https://institutiona...iew?fundId=0085
AND BAM! There is where Vanguard stores their money! BLUE CHIP STOCKS THAT PAY DIVIDENDS:
1 Apple Inc. 2 Exxon Mobil Corp. 3 Google Inc. 4 General Electric Co. 5 Microsoft Corp. 6 Johnson & Johnson 7 Chevron Corp. 8 Wells Fargo & Co. 9 Procter & Gamble Co. 10 Berkshire Hathaway Inc.
When you consider this,
1.) You continue to buy stocks with your savings for 20 years.
2.) The stocks you buy mature, split and return growth like a normal savings account. (exponential growth?)
3.) The stocks are paying you divdends 4 times a year, that you are re-investing (aka step 1 above)
lets say you buy $100,000 of JNJ now:
@ Currently $95/share = 1010 Shares.
@ Currently $0.66/quarter = $2,666/year
With the 2,666 reinvested... $102,666 is your new investment value... without considering the actual growth of the companies value and potetial increase in dividends.
I can't even begin to do the math on that^ alone over 20 years...
Usually you want to wait for these big companies to split and have the shares split price before buying up a few hundred bucks worth... I picked up JnJ 2 years ago after a split for ~60/share. Ultimately, you can gain a HUGE pile of money by investing the money you do make. And of course its a time factor... the longer you keep your money invested, the more you'll make.
Here are some of my recent google quotes by symbol. You'll notice almost all of them have shown growth over the last few years, pay dividends and are actually affordable. (maybe not Google and Amazon) If you get the chance, next time there is an economic crisis, and the market is shit... BUY EVERYTHING so you can ride the money pile up while the market bounces back. If it doesnt ever bounce back... well then your money pile wont be worth the paper it's printed on anyway.
INTC
SLB
WMT
PEP
MRK
AMZN
PM
C
VZ
BAC
KO
T
IBM
PFE
WFC
CVX
JNJ
MSFT
GE
Just my 2 cents... pun intended.
