Chapter Content
Okay, so, you're looking to, like, build some real long-term wealth, right? I mean, who isn't? And in today's world, it feels like there are just so many investment options thrown at you, constantly. You know, everyone's pitching the next big thing, promising huge returns with, like, zero risk. But honestly, you gotta be careful. As they say, there's no such thing as a free lunch.
So, I thought I’d go over some of the best assets for building wealth over the long term. Things that actually, you know, *produce* income. We're talking about stuff that really compounds over time. I'm not gonna get into, like, cryptocurrency or art or, you know, precious metals, because those things don't really *generate* income for you. Just so you know, this isn’t a recommendation, okay? Just a starting point. Always, always do your own research before jumping in.
Alright, so first up, let's talk about stocks. Stocks are pretty straightforward. They're basically ownership in a company, right? Historically, they've given pretty good returns, like, eight to ten percent on average, and they're easy to trade. You don't really need to do a whole lot to manage them. The downside? They can be volatile. You know, the market goes up and down, and sometimes the price of a stock doesn't even make sense based on what the company is actually doing.
Next, we've got bonds. Think of bonds as loans you give to someone – could be a company or even the government. They promise to pay you back over time. Now, bonds are usually less risky than stocks, especially if we’re talking about U.S. Treasury bonds – those are considered pretty safe because, well, the government can always print more money. Bonds usually give you a lower return than stocks, like two to four percent, but they give you a consistent income stream, and they sometimes, you know, go up when stocks go down, which is nice.
Alright, number three: investment property. This is where you buy a house or apartment to rent it out. You know, make some money off it. The cool thing about investment property is that you can use leverage—borrowing money—to buy it. This can really boost your returns, maybe up to twelve to fifteen percent a year, depending on where you are. But, let's be real, being a landlord can be a headache. Dealing with tenants, fixing stuff – it's not always easy, and it can be tough to sell quickly if you need the money.
Then there's REITs – Real Estate Investment Trusts. These are basically companies that own and manage a bunch of different properties, and they pay out the income to shareholders. It's a pretty easy way to invest in real estate without having to deal with all the management stuff. REITs often give good returns, like ten to twelve percent, and they don't always move with the stock market. But, you know, they can still be pretty volatile, especially during a market crash.
Next up is farmland. Yeah, seriously. Farmland can be a surprisingly good investment. It's been a source of wealth for ages. There are even platforms now where you can buy a little piece of a farm. It doesn’t move with the stock market, and it can protect you from inflation, because food prices tend to go up when everything else does. The downside is it can be hard to sell quickly and, well, some of those platforms require that you are an accredited investor.
Okay, so then there's small businesses and startups. Look, investing in small businesses can be really exciting. You know, you can potentially make a *lot* of money, like twenty to twenty-five percent returns. And if you're successful once, you're more likely to find other good opportunities. But let's be real, it takes a *ton* of time, especially if you're actively involved. And, you know, a lot of small businesses fail.
Royalties are another option. These are payments you get for, like, the continued use of something you own, like a song or a book. There are platforms that let you buy and sell royalties. Depending on the risk, you could get five to twenty percent returns, and they don't usually move with the stock market. The catch? The fees on these platforms can be kind of high, and again, you might need to be an accredited investor. Plus, you know, the income can suddenly dry up if, like, people stop liking the thing you're getting royalties from.
And finally, there's investing in your *own* products. This could be anything from selling physical stuff to creating digital products to offering services. The cool thing is you have complete control, and it can be really fulfilling. And if you build something that can grow without you having to put in a crazy amount of extra time, the potential for returns is huge. But, honestly, it takes a *ton* of time, especially in the beginning, and most of these things fail.
So, there you have it. Eight different asset classes that could help you build long-term wealth. You don't have to invest in all of them, or anything. I only invest in four, myself! But knowing about them gives you a solid foundation and, you know, prepares you to take advantage of different opportunities down the road.