Have you ever wondered what your future will be like in the next 20 or more years? Well, how you will be living your life by then depends on your life choices today and especially your investments, thus the need to be wise with how you spend your money.
Living paycheck to paycheck might work now, but it is always good to think about investing so that you will not struggle when the employment taps run dry. It is why you should consider looking into long-term investments that will cushion you in the future and allow you to enjoy a comfortable lifestyle in the future. Fortunately, we have a few tips on how you can achieve that so that you can secure your future, and below are some of them.
The stock market
Investing in the stock market is one of the most common methods of growing wealth without having to work extra hard. You buy into the shares of a company, and then you get to make money from the company’s growth and profits in the form of dividends. However, if you want to earn a significant amount of cash over the years through this approach, you have to invest a decent amount of cash that will provide decent returns.
You also have to be wise with your investment in the stock market because you do not want to invest in a stock that will tank in the feature or a company that does not show signs of strong growth in the future. Long-term investing in the stock market requires investors to consider things like what the company sells and whether there will still be demand for that product or better versions in the future.
These are managed funds that invest in a determined number of stocks that the operators of the fund feel are the most likely to succeed. For example, they may choose to invest in 2o or 50 of the stocks that are currently considered the best. Mutual funds are generally low-risk investments that are supposed to deliver stable growth, especially over the long-term. It makes them an ideal investment to consider if you are looking for a long-term investment.
We, however, recommend that you still do some research regarding the mutual funds that are on your radar. Since management is an essential part of the mutual fund concept, you want to align yourself with a mutual fund that takes the investors seriously and one that has reliable management and a solid track record.
The real estate market
If you have a sizable pile of cash and you want to invest it for stable returns, perhaps consider investing in the stock market. You can do this directly by owning property, which you can then rent out, but building or buying a property requires a significant amount of cash. If your money is not enough to get you into the ownership of physical property, consider real estate investment trusts, otherwise known as REITs. These represent a different avenue of tapping into the real estate market without having to own the title deed to a property. It’s like owning a share of a rental property, and so you are entitled to a share of the rent.
For example, if you put your money in a REIT that is building a mall or shopping complex, you will earn some dividends out of the rental income generated by the property. This approach will allow you to get in without having to invest as much money as you would have needed to purchase your rental property.
Exchange-Traded Funds (ETFs)
ETFs are quite similar to mutual funds. They are investments that focus on an index that is based on various stocks that make up an index rather than investing in the underlying shares. An excellent example of an ETF is the S&P 500 index. ETFs tend to focus on the largest companies in multiple markets, and they also focus on numerous industries. It helps to boost the chances of long-term growth in the future, and this is why they are considered suitable investments for those seeking long-term options.
Bonds are long-term interest-bearing loan instruments through which governments raise funds. Long-term bonds generally span for ten years or more, and they are usually low risk, which makes them a great long-term investment option. However, you still have to exercise caution when it comes to these types of investments. For example, it might not be a good idea to invest in them, especially where the government is not as stable or in situations where corruption is profoundly rampant, and there is little or no economic growth.
The downside with long-term bonds is that they are not as flexible as some of the other options on this list. You have to wait for the bonds to reach their maturity period so that you can benefit from the full interest at which they were stated at the beginning. It might come as an inconvenience, especially when you find yourself in a cash crunch.