Late to the Retirement Savings Party? Add Startup Investing To Fund A Nest Egg

It’s never too late to accumulate wealth. If you are in your later years and feel overwhelmed by your small or nonexistent retirement balance, there’s still time for you to build a nest egg. To start moving forward with investing, there are several steps you can take, including a rarely mentioned route — startup investing. 

Investing in startup companies is a way to build wealth previously restricted to high-net-worth individuals or investment funds. Now, several crowdsourcing platforms allow personal investors to fund a startup for as little as $100. Startup investing provides near-retirees with potentially outsized gains. 

A quick caveat before investing for retirement is to take stock of your debt obligations. If you’re carrying nonmortgage debt such as credit cards or personal loans, draft and stick to a budget to pay down that debt while investing for retirement. These are long-term, potentially illiquid investments so it’s important to understand the investment horizon. But if you have a few years to start building a portfolio, startups can be a powerful option.

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The Power Of The Crowd

Before diving into startup investing, remember the majority of startups fail, and this type of investing carries inherent risk. The failure rate does not mean it’s a futile investment strategy. You can use research tools to find startup companies with higher odds of success because of their management or first-mover advantages. Discover these companies through an equity crowdfunding platform that turns your money into your own investment bank. 

Accessing startup investing is easiest through crowdfunding platforms such as Wefunder. This platform offers investments in startups for as little as $100 and gives entrepreneurs a vehicle for assessing their business’s viability and “buzz.” 

To get started investing in startups with Wefunder:

• Create a free account (there’s no minimum deposit) 
• Find offered startups by searching the platform’s database by various categories
• Conduct your own research by reviewing the company’s management team, assessing its business model and inspecting its financials. Ask yourself whether the company’s market strategy and timeline make sense. 
• Once you find an attractive investment, you can do a bank transfer or use a card to submit funds. The potential earnings depend on the type of investment contract presented by the company and the company’s ability to gather enough capital and succeed in its market. 
• Invest in multiple startups for diversification and to mitigate risks.

There are also opportunities for startup investing within traditional retirement accounts. Republic, a private investment platform for startups, real estate, crypto and gaming opportunities offers a partnership with Alto IRA. With Alto IRA, investors can fund startups and other alternative investments with the potential tax benefits of a Roth or traditional individual retirement account (IRA).

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It’s Never Too Late To Invest In A 401(k) Or IRA

Beyond startup investing, you should also consider retirement accounts. If you start investing today with $1,000 and can invest $1,000 a month for 15 years at a 7% return, you can accumulate a little more than $300,000. This amount can supplement Social Security or a pension, cover healthcare costs and pay for fun excursions with the grandkids. 

If you did not invest in your company’s 401(k) previously, now is the time to start, especially if your company offers a match. If your employer offers you 100% matching for upward of a 6% contribution, that is an effective 100% return. It’s hard to find such an annual return, even if you invest in a high-flying successful startup, so complete the 401(k) signup process today and start socking away “free” money.

You can also open a Roth IRA that allows your money to grow tax-free and features nontaxable withdrawals. Or, open a traditional IRA, which can give you deductible contributions depending on your income. With the Roth IRA, check your single or household income limits, as the Roth restricts higher earners from making contributions. 

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Find Alternative Income Sources

Create new income streams to add to your retirement savings. Multiple avenues are available for earning extra cash, including: 

• Renting a room in your house to leverage high rental rates
• Offering consulting services in your line of business
• Driving for a rideshare or food delivery company
• Teaching classes or tutoring students
• Reselling garage sale finds on eBay 

Once your side hustles generate steady returns, establish automated contributions to your IRA accounts, and set aside money for startup investing. Your side hustles can continue into retirement to keep you engaged and provide extra cash flow. This additional money is a cushion for unexpected expenses and lets you capitalize on the latest startup opportunities. 

Portals Make It Easy

Many portals make it easy to invest in startups with a retirement account. Instead of investing as an individual, investors can opt in to invest as a self-directed IRA or entity. This might require some setup, but once completed, you’re ready to start investing. 

For Investors: For investors looking to get started, ARKHAUS is a startup using a legal loophole to launch exclusive clubs using luxury yachts on the water. This means they get some of the most exclusive real estate on the market, at a fraction of the cost. They’ve already raised over $500,000 from the everyday investors. 

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