Now, the big question: How to invest? I'm looking for stable 6-8% per year over the course of the next 12-15 years. What do I need to achieve that?
Interest rates all go down as stability goes up. Typically, buying government bonds gives the best stability, but current 10 year US bond rates are paying under 2%.
The more risk you are willing to take, the more you may earn, but then the more you could lose.
Only you know how much risk you are willing to take, but younger people tend to be able to take more risks, because, over time, the ups and downs of the market flatten out. And if you have 40+ years to leave the money, then the better chance you have of being in the market for good times as well as bad (Oh yeah, timing the markets - to only get the good times - never works over time either).
One absolute certainty though is to make sure you pay as little to the people managing the money as possible. If you buy a mutual fund, the difference between 0.2% annual fee and 1.2% annual fee is astronomical over time.
I have a bunch of money tied up in the Vanguard Total Stock Market Index Fund which tracks the total stock market and charges 0.17% per year. This type of fund, again, over time, beats out almost all actively managed funds. Managed funds will try and bamboozle you with how they beat the market last year, but if you didn't invest the year before, that doesn't matter.
One technique I also use with extra cash is to buy shares of companies I personally have good experience with - e.g. Apple, Starbucks, Amazon. This is much riskier, but can payoff quite well.
I am not a financial advisor!
(Oh yeh, in the US, you could setup a Self Employed Pension plan to save your money tax free, but this has restrictions on when you get access to the money, but it's something to think about to turbo charge your savings)
Good Luck
My advice for someone who defines his goals to be a fixed stable income is to buy blue chip dividend payers when valuations are reasonable (do research on this... ps it's not now). Then hold forever. Do not buy stocks you have to spend mental energy on (all but blue chips).
If you try to beat the market you'll most likely spend too much time that would be better spent in something else or end up beaten.
A good company to invest in, for me, is just a company with consistent profit growth, doesn't need to be a lot.
You can buy as many good companies as you want, and you should buy different stocks from different sectors, so you won't be greatly affected unless the whole economy collapses.
You can, and should, check those companies only like once a trimester or even a year. Cause prices go up and down, but value in good companies tend to rise in the long run.
I'm 24 and those are things I learned by having the same question.
That's more fun than investing in some other corporation's crap for "promise" of return.
Good thing with houses is that they will always be essential to anyone, and their value won't crush form one day to the other. On top of that, your renter will pay the mortgage for you with their rent.
Hopefully it works. As I don't really have 2 chances at this.