When it comes to long-term investments, the game changes. While at work and on your side gig, you’re focused on making as much money as possible. in these endeavors, low-risk = low reward. With long-term investing, you can make a lot more over time without as much risk. The key to making money this way is consistency. To succeed, you must learn the most important things to look for when planning to invest in long-term moves.
1. Consistency
As was stated previously, the number one thing to look for in your first long-term investment is consistency. As you get more adept, you can get into more up-and-down investments; for the first few, stick with the predictable gains. Things like residential rentals, retirement accounts, and index funds are great ways to land steady gains. Remember, the goal here is retirement, not to strike it big right away.
2. Low Risk
Continuing the pattern of things stated in the first paragraph, keeping risk low is vital. It is extremely easy to lose track of long-term investments, and that can cost you on higher-risk moves. So, making sure that you measure that risk from the outset is a smart way to cover your behind. Create stop-losses on stock accounts, and if you get involved in real estate, don’t rely on rising property values. Land some steady rentals that will always at least cover their own costs.
3. Tax Protection
This is more of a nice-to-have, but tax protections on things like IRAs and municipal bonds make for great long-term investments. Before you decide to put money anywhere, you need t figure out how it is taxed. You don’t want to break any laws on accident. So, while you are covering your bases, allow tax protections to be a factor in your decision-making. Good long-term investments require research, and this is one of the more research-intensive factors to consider.
4. Easy to Maintain
As mentioned before, it is easy to lose track of long-term investments. So, you want investments that are easy to maintain. Things like municipal bonds make it super easy. Buy the bond, wait until the end of the term, take your money. Rinse, repeat. Retirement accounts, and other stock accounts, are also pretty easy. As long as you can check a website, you can maintain a retirement account. You put the money in, wait until you’re 65, then take it out. The only time you really need to check it out is to make sure it is still making you money.
5. “Extras”
When it comes down to two options, you are often looking for some sort of “x-factor”. This really comes into play in regard to things like real estate. Real estate has a lot of x-factors; you can live in it, you can liquidate it, and you can continue to rent it out for extra income. This is where those investments that are more than just money really come into play. While this shouldn’t be your number one priority, it can definitely help you decide between two convincing options.
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Trey LaRocca is a freelance writer, financial sales worker, and tech guy. When he isn’t out and about or at work, he’s usually at home enjoying some video games and a beer. Currently residing in Newport Beach, this California Kid can be found at the beach on any given weekend. Trey has years of experience in day/swing trading, financial analytics, and sales.