5 Best Long-Term Investments to Grow Your Money, #115
Long-term investments are a great way to help you save for retirement and add stability to your future. With so many options available, you need to know which investments are worth the time and resources you will ultimately put into them. On this episode, I’m going to discuss the five best long-term investments to help grow your money and set you up for retirement success.
You will want to hear this episode if you are interested in...
Reviewing why index funds are great investments [1:56]
Why you need to invest in yourself [4:14]
The beauty of depreciation [5:56]
Embracing the entrepreneurial spirit [9:19]
The rules for owning individual stocks [10:42]
Hitting the books to get ahead
One of the best investments you can make is an investment in yourself and your future. A great way to do that is by investing in training and education for yourself and your family. Although, education does not necessarily mean getting a degree. There are plenty of skills and trades that can improve your income potential. Then theoretically, you'll have more disposable income to invest in other opportunities mentioned in this episode.
Before investing in additional education, always do research to figure out what your increased earning potential will be. One of the best ways to do that is through a cost-benefit analysis. If it's going to take you 20 years to get back the investment you're making in education, it may not be worth it. Especially, if you’re entering retirement in that timeframe. However, the ROI is three to five years away, expanding your knowledge base and your income potential is probably well worth doing.
Making the most out of real estate investment
Real estate is an investment I talk about often on this podcast. One of the major reasons you should consider real estate as a long-term investment is depreciation. This allows you to write off a certain percentage of the acquisition cost for the property if you are investing in something outside of your primary residence. For instance, a residential rental property can be written off over 27 years, and commercial property has a write-off term of 39 years. Meaning, that even though you may be earning income off of your real estate investment, you can offset the amount on your taxes through depreciation.
That is on top of the costs property owners usually deduct like taxes, insurance, and other maintenance costs. Assuming you use a mortgage to acquire the property, the income from your tenants will help you pay it down. Once it’s paid off, you could keep renting the property out for additional cash flow or sell it and make a profit. Another benefit to property investment is leverage. Most banks require you to put down between twenty and thirty percent, whereas stocks have to be paid for in full. Real estate allows you to get more exposure with a smaller amount of money. Listen to this episode for more long-term investment strategies!