Long-Term Investing


Long Term Investments may seem like a taboo idea to traders within our community of pennystock traders or swing traders, but the truth is, it is a smart idea. Especially if you are in your twenties. In my honest opinion, you should have two accounts one in which you trade with and one in which you have a retirement plan through mutual funds. Even if you are a million dollar trader or just an average trader, doing this will secure your future no matter what. Of course, you will never see the returns of 50-100 percent like you do on some of your own stock trading but you will grow steady wealth.

    In my family, long term investments has been a staple and has allowed my parents to live comfortably and somewhat stress free. For they started investing in their retirement on their own, long before a company came along and told them too. With that being said, the only knowledge they have ever imparted on me, was a simple phrase. “Time is your greatest asset.”

    The reason I’m so adamant with my friends and my peers about this subject is because lets face it, not everyone is going to play the stock market the way we do. No one in my generation will ever see social security. Most companies do not offer pension plans. So what you are left with is your own investment strategies for your future. Often times, in your early teens and your twenties, it is hard to buckle down and start planning for your future but you have too. The odds are against you. COMPANIES DONT GIVE A  S*** ABOUT YOU. Once you come to terms with that, it should be easy for you to start investing in yourself.

    The next question you probably have is, “how do you get started?” The first thing you need to understand about the finance industry is that not everyone is equal in it. Just like we have Tim Sykes, Tim Grittani, Paul Scolardi, Michael Goode, Rich Jr, Incredible Trades, ect.. or anyone you deem worthy; This same principal exists within the longterm finance industry. Essentially there are good traders and bad traders. For example, my account, which I took 50,000 dollars of my trading profits and put into a longterm mutual fund, is with a guy named Conrad Santiago of Ameriprise Financial. How did I find Conrad? Well I went to (http://online.barrons.com/report/top-financial-advisors/1000). Then you click on the drop down box, next to the phrase, Top Advisors in each state, and presto, there they all are. Then you can start to judge each person on who they are, how they made there money, what kind of strategy they use, and eventually meet with them.

    Once you established who you may want to work with, it is time to understand the strategy of long term investments. Although there can be many types, the overall goal is to make a steady return rate of six percent or higher. For most people, that may not sound like a lot but trust me you will never find anything more efficient in the finance world then stocks and mutual funds. Bottom line. Chances are that at your bank right now you are only getting less then one percent on your money. Guaranteed. PUT YOUR MONEY TO WORK.

    The next concept to grasp in longterm investments is always pay yourself first. Here is just an example of what I mean, if you were just to put 100.00 dollars away each month into an account.

Example:

If you earn $25,000 a year for 40 years, you will have earned $1 million dollars! Earn $35,000 for 40 years, and you’ve earned $1.4 million dollars. And if you earn $45,000 for 40 years, you’d have made $1.8 million dollars!

Pay yourself first and you can get ahead in the savings game. Here’s what can happen when you save just $100 a month for 40 years:

  1. At three percent interest, you would have about $93,000.

  2. At five percent interest, you’d have about $153,240.

  3. If you got a nine percent interest, you’d have about $472,000.

Now you wont always receive a steady rate of 3, 6, or 12 percent but everything averages out, eventually. You will see gains sometimes of 15-20 percent one year and 3 percent the next. Anyway you slice it, it is still better then 1 percent.

    After learning thee above it is important to also look at the most optimistic part of long term investing and that is the rule of 72. This rule outlines how long it will take your money to double. Take the number 72 and divide it by the interest rate you hope to earn. That number gives you thee approximate number of years it will take for your investment to double. At best, if you wanted your money to double every six years, you would need a return rate of 12 percents. Here is a chart of what I mean.

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So, as you can see from the chart, 10,000 can become 2 million in 48 years, which would be right around retirement. Or vice versa, if your parents start you off with a small amount of money when you are born you don’t have to wait that long to have decent money by the time you are 36. lol.

    Moral of the story is the earlier you start, you increase the odds of having decent wealth when you are old, which is what most people need. So what are you waiting for, start investing in your education today. Learn everything you can about investments and start putting your money to work. If you have any questions, comments or concerns, please do not hesitate to ask.

triforce
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3 Comments

Tony
Reply July 24, 2015

a wonderful post you got here and i bet you, this will get many people up and thinking just like i have. thanks a lot matti.

Brandon Cole
Reply March 2, 2016

Hey my name is Brandon Cole, im 16 years old and im just starting to get into investing, but i dont know what i should invest in. i noticed that oil prices are at an all time low right now so im thinking that would be the best thing to invest in considering the prices are probably going to rise in the years to come. would this be a smart long term investment? or should I look into something else. Im open to any feedback you can give me, thx!

Gra
Reply April 22, 2016

Matt thanks for the above post. Am old and I do not think I can get there so quickly but at least I will help my kids. Thanks again.

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