5 big investments you don’t know you have

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You don’t write a check for every investment you make.

in yourself

When you hear the word ‘investment,’ you probably think of your home, stocks and mutual funds, your retirement account, maybe your baseball card collection. But how often do you think of your job?

You should, because for all but the wealthiest, your job is probably your No. 1 investment. Just think of your wages as the equivalent of a portfolio’s income stream. The median household income in the U.S., about $51,000, equals the income of a stock-and-bond portfolio worth more than $1.2 million—assuming sustainable withdrawals of 4 percent a year.

Most U.S. households don’t have anything close to $1.2 million saved. Among households with financial assets like stocks and bank certificates of deposit, the median portfolio was barely $30,000 as of 2010, according to Federal Reserve data. Or, to put it in corporate accounting terms, most Americans are all income statement and no balance sheet.

So while everyone should learn the basics of investing, most workers should treat their ability to earn and save as their biggest asset. With that in mind, here are some hot investments that you probably don’t think of as investments. But for most households, they matter more for growing wealth than the fine details of portfolio management.

Investing money for retirement © Jason York/Getty Images

Your benefits

There are many ways to save, but for typical families, one seems to be working better than others. Between 1989 and 2010, the share of household financial assets held in retirement accounts nearly doubled to 38 percent, according to the Federal Reserve.

Not coincidentally, the number of active 401k participants has also ballooned, from 7.5 million in 1984 to 73.7 million last year. Few savings vehicles can match the 401k on features that promote long-term success. Workers typically add automatically from their pay and get a tax break on their contribution, plus, more often than not, a matching contribution from their employer.

Even a middling 401k experience can pay off handsomely. A Congressional Research Service study in 2007 projected that a median-income household could stash away $468,000 after inflation in a retirement account by age 65 simply by starting at age 35, contributing 8 percent of pay and earning typical stock and bond returns. Worker benefits can add to wealth in plenty of other ways

Group life insurance can be a money saver too. Many plans offer a small amount of free coverage and the opportunity to buy more with few questions asked about health—a boon for older or unhealthy workers. Also, don’t forget health insurance, tuition reimbursement, corporate travel discounts and credit unions.

Then there’s Social Security, which is basically like a lifetime annuity from an insurance company. Some couples retire with Social Security income equivalent to that generated by investments worth over $1 million.

Read more: 5 big investments you don’t know you have

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