Earning money while you sleep sounds like a fantasy, but the fact is that it’s being practiced by most people who have gotten into the habit of investing their money. In the same way, you can do this too, and instead of always having to work for money, you can make your money work for you.
There are many ways you can start, and maybe you already have – whether you are an individual or a business entity. There are short term investments that you get to hold for a brief period of time – less than a year usually – and sell or cash in on as easily as you bought them. And then there are long-term investments that are not going to be liquid for you for at least a year, and typically will stay this way for as much as ten years or more.
Here are some things to remember.
- Long term investments carry with them a great host of benefits. You will understandably have more risk just with the fact that the money is not going to be in your hands for a set period of time. However, with that comes higher returns. This gives you more financial advantage over putting your money in more liquid instruments.
- Understand that sometimes, the longer you keep the money in the instrument before selling it or withdrawing it, the higher your potential returns.
Your risks are going to be tantamount to the gains you could possibly get – so make sure that whenever you are placing money in a long term investment, you do your due diligence with the seller of the instrument. It would be good to check how they have fared as a company over the years, how buoyant they are when economic downturns and slumps hit, and how volatile their stock values are during unavoidable market fluctuations.
Putting a significant amount of money in a ten-year time deposit is no easy feat. You may want to get a professional assessment on the company’s financial standing from experts such as those from Diligence International Group. These specialists will be able to help you evaluate a company and decide whether your money will be in good hands.
Growing your money over a long period of time is a major decision, so do it with your main goals in mind. Is it for your children? Grandchildren? For your retirement plans? For increased security and wealth acquisition?
Having these goals clear in your head will also help you assess what the best long-term investments are for you. You can start with the following:
- Real Estate
Real estate is one type of investment that is known to increase in value over a long period of time. Apart from that, it is flexible in terms of utility – you can develop it into either a commercial, residential, or other money-making entity; you can choose to reside in it; and of course, you can sell it for a higher price when its value eventually appreciates.
- Dividend Reinvestment Plans
Instead of being subject to the volatility of the stock market, you can enroll in a dividend investment program where you buy dividend-paying stocks, but instead of getting paid in cash, your earnings get reinvested for you. This compounds your earnings and provides a tidy profit when you cash in on them years later.
The longer you keep your bonds invested, the greater the money they make for you. Bonds don’t suffer the same volatility that stocks do so this is a great and less risky way of investing your money in the long-term.
Here you will see the benefits of long-term investing. Carve out your financial goals as soon as possible so you can choose the best path for your money to grow.