Having a plan to invest is one of the important things that you need to consider and immediately decide what investment you want to make, long-term or short-term investments.
Investing is one of the things that is very useful for your future because a problem that you don’t know will happen in the future, investing can help you.
Risk is something that can happen anytime, anywhere, and for anyone. Speculative risk is the risk that can be predicted or predicted in advance. Pure risk is the risk that occurs suddenly.
Long-term investment instruments carry a relatively low risk if studied carefully.
Therefore, if you do not make investing a day’s work, an alternative option that you can use is to have a long-term investment.
Financial planning is a step that many have taken, especially by those who are financially literate.
Investments can be divided into 3 types, namely short-term investment, medium-term investment, and long-term investment. The three types of investment are differentiated based on the investment period itself.
Definition of Long-Term Investments and Examples
A long-term investment is an investment in the financial sector with the longest investment period, at least more than 5 years.
Long-term investment has the potential for substantial returns and it is hoped that one day it will become a source of a permanent stage in the financial sector.
In general, this long-term investment does require a large amount of capital, although some types of long-term investment can now be started with small capital.
But as the name implies, long-term investment serves a financial future and the returns will only be maximized if this investment is disbursed according to the investment period from the start.
This means that you must be disciplined and able to manage your investment well during the investment period itself and avoid disbursing your investment before your investment period ends.
8 Best Long Term Investment Products To Consider
Before making a long-term investment in finance, it is very important for you to know and understand this investment well from the start.
This will really help you to be able to more easily manage these investments in the future so that they can provide maximum returns on your finances.
There are several types of long-term investments that you can make as an option, some of which are as follows:
Long term investment – Stocks
Stock investing is one type of long-term investment with the greatest potential for returns, especially if you can choose the right stocks from the start.
In investing in stocks, you will act as an investor for a company, where you invest a certain amount of capital into the company.
This investment process will usually begin with the issuance of shares by a company that requires fresh funds, then you invest in the company and get proof of your share ownership.
In this stock investment, you will get income from 2 different sources, namely dividends (profits) earned by the company to the shareholders.
As well as the capital gain or the difference between the selling price and the buying price that you get from these shares (if you sell them later).
In practice, this dividend can be given in the form of cash directly to your account or in the form of shares which in turn will increase the number of your shares in the company.
Bonds are debt securities issued by companies, both government and private.
When you invest in bonds, you will receive the bonds as proof of borrowing your funds from the company. The investment you make will generate a number of bond interests.
Where this interest can be paid periodically or even at once when the company pays off your bond investment.
In investing in bonds, you will benefit from interest payments and also the difference in buying and selling prices when the bonds mature.
Investment in the form of property is one of the most popular and is widely used as an option.
This investment requires a lot of funds, especially if you intend to invest in a strategic area with a high enough price.
However, this amount of capital will certainly be proportional to the potential benefits that you can get from the property investment itself.
The potential benefits that you can get from this property investment are also quite diverse, including the difference between the purchase price and the selling price, rent, business results, and others. Here are some types of property investment that you can choose from.
Who doesn’t know this property? Residential properties are often found in big city areas. Property investment in the form of an apartment is a big decision. The reason is, the capital that must be prepared is also not small.
Even though the capital required is not small, but it is proportional to the benefits that will be obtained. The increase in apartment prices is quite significant.
So it is very suitable to be used as an investment option. No wonder the apartment is a profitable type of property investment.
Also Read: 7 Best Short-Term Investments
Residential or Luxury Minimalist Homes
The property investment target that is no less profitable is the house. It is likely that the house is one of the most coveted property investments.
As it is known that many people need a house. Especially if the house has a minimalist and luxurious design.
The capital that was started with the loan can be repaid from the investment in the house. Even the amount of profit you get is not small. The house is indeed a profitable type of property investment.
Almost everyone wants to target this one property. The reason is, the value never goes down and quite the opposite. Investing in the land will yield huge returns if it is strategically located.
The more strategic the more people are targeting the land. The development of land investment can be said to have opportunities from year to year.
The many types of profitable property investments are opportunities that need to be exploited. In addition, the opportunities provided are also very profitable. Therefore, it never hurts to invest in property.
Mutual Fund Investments
Mutual funds will be the right investment choice for those of you who don’t have much time to manage your own investments.
Mutual fund investments are managed by professional investment managers who are experts in their fields.
In practice, this investment will be allocated to several different investment instruments, so that diversification can be carried out properly.
This is important to do, to overcome the risk of failure that may always occur in the investment activity itself.
You will get a number of benefits from the investment you make, after deducting the management fee for the investment management services that you use.
Money market funds
Money market mutual funds are allocated for deposits and securities with a maturity of less than one year.
So do not be surprised if this one instrument has a smaller risk than the others. However, this type of mutual fund can provide benefits compared to deposits whose interest rates continue to be eroded by inflation.
Fixed-income mutual funds
The majority of fixed income mutual funds are allocated to government and private bonds and money market instruments with more stable movements.
Fixed-income mutual funds offer large returns with minimal risk. Because investment is diverted to long-term debt instruments whose value fluctuates, the risk of this investment is moderate.
Mixed mutual funds
Mixed mutual funds are a type of mutual fund whose funds will be divided into several sectors, namely stocks, bonds, and the rest in the money market.
Since mixed mutual funds divide mutual funds into stock products, the risk is somewhat higher than for money markets and fixed income.
Because the stock composition is not too large, the risk is lower than that of equity funds.
Equity mutual funds
Equity mutual funds are a type of mutual fund whose funds will be allocated to shares.
Even though they both play in the stock sector, investors who buy equity funds cannot enjoy dividends like shareholders.
That’s why equity funds have a lower risk than stocks.
However, the return offered by equity funds is higher than other types of mutual funds.
Gold is the type of long-term investment that is most in demand because the price is relatively stable and tends to rise.
In addition, this one investment can also be done with small capital. Lately, gold investment can even be started from a very small capital in the form of gold savings.
There are many types of gold investments that you can make as an option, including savings gold, gold bars, gold jewelry, and others.
The profit that you can get from this investment comes from the difference between the buying price and the selling price.
For those of you who are also interested and want to invest in gold, then of course they understand very well that this investment is usually made in the form of gold jewelry or gold bullion.
Both of course have their own characteristics and advantages, where you can choose which type of gold is the most appropriate for investment.
What is the difference between investing in gold bullion and gold jewelry?
The choice of the type of gold for this investment will later affect the investment value that you will make.
Therefore it is very important for all of you to consider carefully from the beginning so that the investment you make can be successful and you also get even more benefits.
Choose the Right Type of Investment for Your Finances
Doing long-term investment activities in the financial sector is a smart step you can take to secure your finances in the future.
Make sure you fully understand the investment instrument that you will choose so that you can manage it more easily.
Choose the right investment and according to your finances, so that this activity can provide maximum benefits for your finances. Thus the article on long-term investment may be useful.