4 Types of Investments Your Future Self Will Thank You for Making Right Now
The best investments are the ones that will appreciate in value over a period of several years or decades. While short-term investments can increase your returns over the course of weeks or months, it is not a winning strategy to build financial security. Let’s look at some investments that can benefit you now and in the long-term.
Buy Shares in an Index Fund
Index funds allow you to have exposure to every company that trades shares in a given index.
They are ideal because the stock market has increased in value by an average of 7 percent annually since its inception.
This figure takes into account all recessions and the Great Depression. The best part is that it is a passive investment, which means that you pay less in management and other fees.
Acquire a Stake in a Blue Chip Company
If you don’t want exposure to an entire index, you can buy stock in specific companies instead. Companies like Coca-Cola, Target and Unilever have offered dividends for the past 50 years.
The amount of the dividend increases each quarter, which helps to increase its yield. Large companies such a Coca-Cola and Unilever offer a diverse range of products, which helps them to stay competitive over long periods of time.
Buy a Rental Property
Rental properties allow for two different types of long-term revenue streams. The first revenue stream is the monthly rent check that you collect from your tenant.
The other is the appreciation of the house or building over a period of years and decades.
As a general rule, you can expect an annual return of 8 to 10 percent annually in the real estate sector. If you don’t want to buy a building, you can buy shares of a REIT to gain exposure to real estate.
Purchase Gold or Silver Coins
Buying gold or silver is as easy as going to gold and silver coin shops in your area. It may also be possible to buy precious metals online or extract them from items that you have around the house.
As they are tangible assets, they act as a hedge against inflation that can increase their value relative to currency or other investments.
Ideally, you should be looking at investments with returns exceeding the rate of inflation. If you have any questions about a particular investment, don’t hesitate to ask a financial adviser.
This can help you create a portfolio that offers consistent long-term returns.
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Category: Investing
