One time investing strategies work the best when they are involved with the element of time. An investment that a investor involves only for once during buying, holds it forever and enjoys the returns for a life time will be considered as a good investment.
In this blog, there are 5 such one time investing strategies an investor can consider for long term wealth creation.
Real estate investment
Investing in real estate is by far the most traditional form of investing. Earlier, a person was termed to be wealthy if he owned lands. A piece of agricultural land has now coined the term real estate. Earlier these agricultural lands were used to grow crops and give it on lease to farmers etc.
Today, real estate properties have the potential to earn money by putting them on lease. A real estate property can be a residential property, a commercial property or even a warehouse. Thus, real estate properties are great for long term investment. This is because, they not just increase value due to capital appreciation, but also provide a regular monthly rental income.
Investing in a Franchise model
Franchising is a contractual business model or partnership in which an established brand leases its branding, business strategy, and other intellectual property to an independent business owner.
A typical example can be a food business like Domino’s pizza. You too can own franchise of the pizza company and make profits by using their brand name. Since the brand of Domino’s is already established in the market, you may not need to spend additional money on marketing or customer acquisition.
A franchise model works by collaborating with the business and making progressive income out of it. Indeed, one can expect a healthy cash flow in a franchise business yielding a return of 25- 60% per annum.
Investing in Gold
Gold can also be regarded as a good investment tool for long term. It is a commodity that tends to appreciate in value of time. Gold also possesses an intrinsic value and less volatile compare to other investments.
If you consider the 30 year Gold price, you will see that the commodity has yield an average annual return of about 15 – 18%.
This return is consider an excellent return during the course of long term. Gold assets are also highly liquid assets, as they ca be sold or used as a collateral for loans in case of emergency.
Investing in gold is also a good source for portfolio diversification as it acts as a hedge against equity investments. If you have noticed, whenever the index has crashed, the gold has appreciated in value.
You might also like: Sovereign Gold Bonds: A Better Alternative To Physical Gold Investment
Mid cap mutual funds
Mid cap corporations are often well-known local brands that want to grow national in the future. A popular mid-cap firm in South India, for example, may go national or even global with the right development plan. As a result, income is generated for the stakeholders in a long course of time.
Mid cap mutual funds come with an added risk and high volatility. But the same can be drastically minimized when they are hold for a long duration.
You might also like: Why Are Mid Cap Mutual Funds Better For Long Term Investment
Index funds are by far the most important asset class. All investors, irrespective of their age and risk appetite need to have some portion of their investment parked in index funds.
They invest the money in top 50 companies of the country. As these companies are spread across different sectors, they help the investors to easily diversify the portfolio and reduce the risk.
Investing in an index fund of a country can also be regarded as indirectly investing in the economy of the country.
Bonus: Investing in early start ups
Investing in early start ups gives an edge to the investor to pick businesses at right valuations. The greatest advantage for investors is that they get a majority shareholding in the company.
The risk involved in investing in a start up can be tremendously high as there are very less chances for the start up to turn out profitable. An investor needs to see the business beyond numbers to understand the future of the business and predict the growth.
Priority of investing
The priority of investing may differ from investor to investor, depending on the risk appetite and capital surplus. This is a basic priority an investor needs to consider for long term investing strategy.
- Index funds
- Mid cap mutual funds
- Real estate
- Gold assets
- Franchise of a business
- Early startups
One time investing strategies can be of great advantage to investors for generating consistent wealth throughout. This can be a good way to attain financial freedom.
If you have any other such investing tips that I have missed out, do put you thoughts in the comments of this blog. Happy investing.