Long-term and short-term investments generally require entirely different investment strategies. As a result, you should make sure that you actually know how to invest long-term before you make any major investment plans. Also, if you know that you want your money to go into a long-term investment, you might be able to get better deals, interest rates, or make wiser investment choices.
The first thing that you should do if you’re looking to invest long-term is to start a retirement account. There are several of these available, and all of them provide tax breaks or other benefits for putting your money into the retirement account and leaving it there for a while. This is also the single most important type of investment that you can make.
Some of the most common investments for long-term retirement accounts include individual retirement accounts (IRAs) and 401k plans that you can get through your employer. Generally these types of investments are very low risk, but will still add up over several years so that you have a decent amount of money when it is time to retire.
There are other ways that you can invest long-term, however, after you’ve finished setting up your retirement accounts. For instance, you should look into mutual funds that have a long-term history of doing well. If the fund seems to steadily do well, then it is probably safer than some of the other options. However, you should also make sure that you read about the mutual fund’s goals before you invest.
One of the best types of mutual funds for long-term investments is an index fund. Index funds are designed for long-term investment, as they are put together in order to follow the rise and fall of the stock market as a whole. While there will likely be some bumps and you could stand to lose some money, chances are good that you will actually earn money over the long-term.
No matter what type of funds you decide to invest in, the most important part of how to invest long-term is patience. Most long-term investments will not give you a high return (or even any return at all) in the short-term, but if you are patient, eventually your investment will be worth your wait.