Everyone with an entrepreneurial turn of mind would like to make sure that your money works for them. It’s a simple concept, but somewhat difficult to execute. In essence, if you manage to save up, and your savings are approaching a decent amount, it may be time to start investing. Here comes another question though – what investment is good and what is bad?
Are long-term commitments better than short-term counterparts? It all boils down to making up your own mind and if you were to listen the world’s most respected and successful investor, Warren Buffet, then you should know that “investing is a long game”.
Play the Stock Market and Play the Long Game
To revisit the wisdom of Warren Buffet, the stock market is one of your starting points. Buffet bought his first stock when he was only 11 and he has been investing ever since. Worth roughly $82 billion today, Buffet continues to make headlines as the most successful investor in history. The key to his success, though, seems to be the mentality with which he approaches any investment subject today.
Stocks, Buffet believes, will continue to increase in value over the next 30 years, which makes them a perfect investment target for anyone looking to play the long game. Immediate return on your investment (ROI) is not something that Buffet believes in, but unlike most investors, he had started nearly a decade earlier than anyone else.
Want Short-Term Return? Check Out the Treasuries
If you are dead set on reaping rewards sooner rather than later, you might want to consider Treasury bills or T-bills. These assets are immensely popular and they have a very low maturity date, usually three, six or 12 months, which means that you can claim up to 4%-5% ROI just by investing in T-bills. This is not bad at all, although it’s certainly not the most efficient way of using your money either, some, including Buffet believe.
This sort of investment, though, is an almost sure-fire way that you will be reaping a slight profit on your savings and often much more than any bank can offer you in terms of interest alone.
Real Estate – What About the Bubble?
Investing in real estate is always a smart choice if you ask us. With the market and the time we live in making it almost impossible to purchase you first home before your late 30s, there are many people who would look down on the suggestion, though.
However, just like with Buffet’s prescience and decision to start investing when he was 11, you can also make sure that you get a head start. If you are going through college, this would certainly be a bit of a drag, as your debt is probably accumulating even as you read this.
At the same time, this needn’t necessary be true for other parts of the world where people are less prone to be indebted as a result of pursuing a degree. With this in mind, real estate is still a good investment. If you manage to buy your first apartment early on, you can stop paying rent, which will be a major overall improvement in your financial situation.
You can either live with family while saving or just focus on buying a modest but reliable apartment first. If you have managed to secure your first property before your 30s, you will most likely end up with 2 or 3 rent-ready properties by the time you are 36. A popular investment model is to take a credit, buy property and rent it out. This is another long-term investment with real, short-term ROI.
Playing the Lottery – A Small Budget to Test Your Luck
A serious investor would tell you that lotteries don’t work and they will be true. However, allocating a small budget to play at legal real money casinos or purchase a few tickets a month will definitely not be too bad of investment.
The important thing is to keep a cool head and to treat this investment with detachment, as it is very unlikely to turn a profit. However, the upside of taking your chances is that if you do turn out to be lucky, your ROI can potentially have life-changing effects.
Leverage Your Skills Well
Forbes call is it a “side hustle,” and it is indeed a great way to improve your overall financial well-being. However, you need to understand that working multiple jobs will sooner or later have a negative impact on your quality of life. As Buffet says, “the poor invest their time”.
Putting time in to get money out will usually be a good way to collect the means to make more serious investments, however it shouldn’t be your primary goal. Every time you find a way to earn more money by simply working, you will see that you will be hard capped unless you press your rates a little further.
So, if you were only making $2000 a year ago, and this amount is chasing $5000 today, this is great, but you might want to start and moving into investment territory. After all, you will want to listen to Buffet’s advice and make sure that your money is working for you rather you having to invest your time.
Self-Improvement Is Key
The simplest form of investment is often the most challenging. Self-improvement is good both in the short and long-terms. You get an opportunity to pick new skills, boost your productivity and earnings in the short-term while preparing for a more drastic improvements further down the road.
Being a smart investor is all a matter of motivation. Some people want a better standard of living for themselves while others need funds to change the world.
Whatever your own motivation, it’s no less worth fighting for. Take this investment advice with a grain of salt and remember what Alibaba’s CEO and Founder Jack Ma has said about investment – “poor people are afraid to invest and that’s why they remain poor.”