Best Long-Term Investments for Lasting Financial Success

best long term investments

Everybody dreams of significant gains when they invest their money. Unfortunately, things aren’t that easy.

While risky investments can give you better results more quickly, they are also a great way to lose your money. If you aren’t careful, you can end up wasting all your savings. Long-term investments are a better way to invest your money.

Are you ready to get started investing long-term and don’t know where to start? Below are eight of the best long-term investments that will help make your money work for you.

1. 401k

Do you work for a company that offers 401k matching? If not, you’re missing out on free money.

A 401k takes pre-tax money for your paycheck and puts it into an investment. Many companies offer matching up to a certain dollar amount every year.

These investments are a great way to defer your taxes during the year. This is great if you’re in a higher income tax bracket. If you wait until you make less money to take the money out of your investment, you’re going to get taxed at the income bracket you’re in at the time.

2. ETF

Not everyone wants to spend time looking at every stock out there when investing. It can take a lot of work to figure out if something is worth buying into.

If you’re in this situation and still want to invest in stocks, an ETF is a great option. Instead of picking one stock to invest in, you choose a fund.

Most ETF funds allow you to buy into a part of the stock market. Some funds will enable you to buy the top companies in your local and international markets. Doing this will enable you to make a simple choice and diversify your risk across many companies.

3. Dividend Investing

Many people look at long-term gains when picking where to park their money. However, you can find stocks that provide you passive income throughout the year.

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A dividend is a payment given to shareholders based on the amount of profit a business generates during the year. They are typically given quarterly to all stockholders.

If you get enough dividend-paying stocks, you can generate long-term income during the year. You can use this money to re-invest in the market or take it out as regular income.

4. Bonds

If you’re looking for something safer than the stock market, bonds are where to look. You can think of a bond like a loan. You can give these loans to businesses and governments.

As time goes on, the person you buy the bond from will pay interest on the money you give them. The return you receive is based on the national interest rate.

If you see interest rates rise, then the amount you make during that time will go down. It won’t affect your money if you keep it in your bond during the length of your term. However, you will lose money if you take your money out before your term is up.

5. Mutual Funds

Are you not interested in the day to day management of your investments? A mutual fund is what you’re looking for.

Mutual funds offer you a diverse investment portfolio that includes stocks, bonds, and other investments. You rely on an investment firm to manage your money.

Unlike other investments, mutual funds are generally actively managed. The people that handle your money will try to outperform the market and try to get higher than average returns.

6. High-Interest Savings Account

Are you risk-averse and don’t want to put your money in the market? You still have options if you’re going to park your money in a savings account.

Many bank accounts offer very low-interest rates when you keep money with them. You may be able to make a few cents every year.

The good news is that several savings accounts offer excellent rates for keeping your money in them. Put your money there to see a better return on your money. You’ll still be able to transfer any money back to your checking account when you need cash.

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7. Certification of Deposit

Do you just want to give your money to the bank and be done with it? A certification of deposit allows you to do that.

A certification of deposit is a guarantee that you’ll leave your money with a bank for an extended period. The interest rate you receive will depend on how long you let your bank have your money. The longer your terms are, the better rates you will receive.

Don’t use a certification of deposit if you might need your money in the future. You won’t be able to touch your money until the term is up. There are harsh penalties if you try to withdraw your money early.

8. Rental Properties

Have you ever dreamed of becoming a landlord? If you save enough money, you can become one yourself.

Real estate has been considered one of the best long-term investments for a long time now. If you’re smart with your money, you can buy several rental properties and get rental income for well into the future.

The good thing about real estate is the rent you collect is used to help pay off your mortgages. Your net worth goes up every month that you own real estate.

Real estate also provides many tax advantages for you to take. Read more here about one of the most significant tax advantages you have when buying and selling properties.

Don’t Ignore the Best Long-Term Investments Out There

If you’re looking to invest your money, think twice about getting into a risky investment. The best long-term investments above are the perfect place to put your money. If you give them enough time, you’re to have a good chance of making money in the future.

Do you want to learn more about putting your money to work for your family? Head back to our blog to discover our latest personal finance tips.

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