Making long term investments is the tried-and-true way for regular folk to protect their capital and generate lasting wealth. There is a lot of truth in the old maxim that poor people earn money to spend, rich people earn money to invest. This is why long term investments are so vital to providing you with the resourcecs you need to live the retirement you deserve.
While it’s tempting to chase the higher rewards that come with some short-term investments, these come with much higher risks. Take crypto for example. People invest because they dream of making 1000% returns in the space of a few months or even weeks. Some people have realized this dream. But, more have lost everything.
Of course, some short-term investments can be part of a diversified portfolio. But smart investors know that slow and steady wins the race. Therefore, smart money always allocates the largest part of their portfolio to long term investments.
We take a look at some of the best long-term investments you can make in 2021.
Truffle Producing Trees
An investment in truffle producing trees is unique in offering high value returns over a long period of time, without exposing you to high risk.
Truffle producing trees can be considered an agricultural investment, an investment class that has always been a favored investment by the wealthiest in society. These individuals, and the financial institutions who they employ, always ensure they have suitable exposure to agriculture. This market operates apart from the the stock market and traditional finance, making it one of the ultimate diversification plays.
An investment in black truffles is a green and ethical investment. The greed and decadence of Wall Street and the banking industry brought the world to its knees back in the late 2000s. Unfortunately, most of the long-term investments that people make will end up making these same bankers and traders richer. Truffles is a way to make mother nature richer, as your money is used to plant native trees and replenish local ecosystems.
The real estate market in Europe and North America remains strong. Investing in these areas will continue to be profitable. It’s no coincidence that major institutions such as Black Rock are now buying U.S. real estate at a tremendous pace. Expect Black Rock to become a major landlord in the coming years.
Investors looking to purchase real estate overseas should be sure to check market liquidity before making a purchase. If you are buying a home this isn’t a big deal, but if you’re buying for investment reasons it’s an absolute must. Houses that have been on the market for months and even years should be a major red flag.
Once you have identified a solid real estate market there are lots of ways to make money. The best is to become a landlord and rent out the property. This will usually cover the cost of the mortgage with a little extra. Be sure to have enough savings to pay at least one year of mortgage payments, though.
Index Stock Funds
The stock market considers the long term to be more than one year. For the purpose of this article, we’re talking about at least 10 years. This allows enough time for the market fluctuations to even out.
Investing in index stock funds is safer than selecting individual stocks and will save you a lot of time and worry as well. Buying an individual stock means researching the company, as well as tracking their performance and following the stock’s price.
When you invest in an index of stocks, you’re buying a basket of different securities, usually stocks from the SNP top 500 companies. Index stocks are steady performers, the goal is to match the average returns provided by the market. This makes index stocks a good place to park some funds for the duration. You can achieve decent profits with less risk than other stock market options. The fees are also low, typically around 0.2%. When you’re exposed to the market for a long period of time, these low fees become very important.
Dividend stocks are one of the classic ways of generating a regular income. When you invest in dividend stocks, the company you invest in agrees to pay you a set amount of interest. This is pre-agreed, and usually paid out on a quarterly basis.
There are dividend stocks to suit every portfolio. The safest will offer returns of 4% or less. Returns over 8% come with a lot of risk. For long term dividend stock investments look for well-established companies.
Spend some time researching the companies that you are interested in and find out what their strategic vision is. Better yet, speak with a financial advisor. Expert advice never comes cheap, but these people earn their money. When you are enjoying the fruits of your prudent investments, it will seem like money well spent.
An IRA or Individual Retirement account is a popular way to top up your retirement funds. You agree to deposit your money with a financial institution for a set period. In return, you receive a concrete rate of interest for the duration of the IRA.
IRAs also come with valuable tax incentives making them a solid, if unspectacular way to make some long-term savings. Another good reason to invest in an IRA is that your money is insured. Invest in an approved credit union or bank, and your money is fully insured up to the value of $250,000. This kind of security and peace of mind makes an IRA a safe place to park a piece of your wealth.
Government bonds have long been regarded as one of the safest investments going. You lend the government a certain amount of money in the form of a loan. The interest is paid back by the government at regular intervals depending on the agreement. Once the bond is complete the investor gets their original loan back.
Rates for this are low but unless the government goes broke you can be sure of getting your money back. Inflation can also eat into your profits. If you think that high inflation is a possibility, then bonds lose some of their attraction.
Long-term investments are the tried-and-true way to protect your money and move towards a better future for your loved ones and future generations.
All the options mentioned here can help you reach your financial goals. Truffle producing trees stand out here as a safe option with high returns. These profits just aren’t available on the traditional markets, without taking on a great deal of risk.