As people are making money, figuring out where to put that money is a hard but necessary decision. There are many places to put it that will help to deliver the best long-term returns including stocks, real estate, and bonds.
Stocks
Investing in a diversified portfolio of stocks and mutual funds can deliver strong returns over your lifetime. Investing in stocks is arguably one of the most common ways to invest. This kind of investment yields the best long-term results. There are many different reasons why stocks are valuable but the main reason is that cash will lose its value unless it’s invested. Inflation is constantly moving and will eventually make everything cost more over time, meaning that money is slowly losing value. For long-term results, stocks will grow over time and help you to save for retirement.
Real Estate
There are many pros as well as cons to investing in real estate. Real estate has predictable cash flow, appreciates in value, can be leveraged, is tax deductible, and many other things that make it a valuable asset class to invest in. You can get financing via an SBA loan for commercial real estate. This makes investing in real estate for partnering lenders extremely valuable since the SBA won’t lend to small business owners. This reduces risk and makes it easier to access capital. Capital is valuable especially when you’re looking for a long term investment. Real estate is a daunting choice but eventually will return more than is expected.
Bonds
When choosing which asset class to invest in, many may choose bonds because the income stream is predictable, similar to real estate. There are three main types of bonds: corporate bonds, high-yield bonds, and municipal bonds. Bonds can give a steady stream of income, preserve capital, and help you to earn a predictable return. However, like anything related to finance, there are risks. There’s inflation, liquidity, interest rate changes, and credit risk. When choosing bonds, it’s important to do some research into which bond you’re choosing and the risks involved.
Investing can be intimidating, but once you know the possible returns and risks then you can make an informed decision about your money. Finding a good place to put it and yield as much as you possibly can is the ultimate goal. This can be achieved through stocks, real estate, or bonds.
For more help on planning your finances, make an appointment with Mike today!
