“It is human nature to think wisely and act in an absurd fashion.” ~ Anatole France
The purpose of your investing money jar is to grow your wealth over a longer term (over a seven to twenty years’ timeline). This investing money jar is usually meant for retirement funds, children college expenses, or long-term dream (e.g. a yacht, a plane, a trip-around-the-world).
Since investing jar has a longer timeline, it is important to find investment vehicles that yield a nice rate of return on investment (ROI). When I say a nice ROI, I mean steady 8%-15% annualized return on your invested money. Unfortunately it is a very challenging task in a current extremely low interest rate environment.
Personally, I like investments that are valued cheap, are hated at the present time and started to rise. For example, real estate properties in 2011, precious metals in 2001-2004, stocks in spring 2009.
Diversify Your Sources of Income
If you’re starting your investment strategy from scratch and can only invest a couple of thousand a year, you won’t become wealthy for a very long time. Don’t get me wrong–it’s a great start. But, obviously, the more you invest with even mediocre interest rates, the faster your wealth will grow.
Relatively small but steady increase of the investment amount in a form of consistent contributions will fill your investing money jar faster. Having MULTIPLE CHANNELS OF INCOME is one of the main secrets of acquiring wealth.
The ultimate goal is to be able to provide a comfortable living for yourself and your family from each individual stream of income. This is much more prudent way to achieve wealth than getting into risky investment whether it’s your stocks, options, expensive real estate or any others type of investment.
The idea here is to leverage your skills, experiences and hobbies to expand your earning potentials.
Read more on this topic next week.
To your Health, Wealth and Happiness,