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Okay…numbah one…I got a little ” grammar” problem with your question…Do you mean ” How do I start planning at 40 ? ” or do you mean ” How do I plan to retire at 40?”
If you want to retire at 40 you can’t use IRA’s etc…it’s just outright save and invest every penny you can find between now and then…give up all luxuries with that ” 40 goal” in mind… but bear in mind…even if you make great investments between now and then, you’ll be giving a lot to the politicians to ” play” with ( TAXES)
Now…on the other hand…if you ARE 40 and you want a plan…it’s almost the same…save and invest, save and invest…BUT in your case you can make those investments in a ROTH IRA… make THOSE wisely and it’s ALL YOURS…when you’re 60…
At forty, you’re playing ” catch-up” so make some of your investments in the sectors that are currently “high-flyers”…
hoping for returns in the high teens, low 20′s…forget about bonds and safety for about 7 or 8 years…. a good international fund could be part of your catch-up…and maybe some ETFs in agriculture, energy… MOO, DBA, USO OIH.
BUT, those are things you have to keep abreast of…and be ready to move to what gets ” hot” maybe this Christmas season…certain retailers..maybe ” tech” in general…REITs could even be making a come-back by then.
a little payment to yourself out of each payday adds up fast for your rainy days. the economy goes up and down…
Retiring as early as 40 will be difficult, yet not impossible.
One thing you can do is invest in foreign markets – the US economy isn’t doing so great right now, but foreign markets are. You can invest in mutual funds which operate in foreign markets, or look into index funds in the asian and european markets.
The US economy could turn around very quickly, however, but if you want to invest your money wisely, it wouldn’t hurt to diversify internationally.
Your first option, should be to open a retirement account. This is always a good investment, regardless
of who you are.
If you have fully funded your retirement account and would like other options, you should consider a DRIP Plan.
They are seldom recommended by brokers due to the low rate of commissions received. However, these
reinvestment plans can be very powerful long-term investments. Studies have shown that DRIP’s are one of
the best strategies on Wall Street.
They are inexpensive and easy to start. New investors to the stock market should definitely consider a DRIP Plan.
Companies like Toyota, Royal Canadian Bank, Sony, Bank of America, General Electric and many other Blue Chip
Stocks can be purchased through your DRIP Plan, with as little as 1 share in most cases.
These long-term plans are great for beginners as well as veterans. Check them out.
Best of Luck