These are my top 5 favorite investments, why I invest in them, and how you could get started doing something similar, as well – enjoy! Add me on Instagram: GPStephan
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The first, and something I advocate NONSTOP here on the channel is: INDEX FUNDS
Now, for anyone who isn’t aware what an index fund is – it’s pretty much a portfolio of certain investments that you can buy into, and then you own a small, fractional percentage of everything.
And historically, an investment like this – over the last 100 years – has seen a return of almost 7.5% annually, when adjusted for inflation, with dividends re-invested. This is the reason why Warren Buffet suggested that the MAJORITY of investors out there, just place 10% of their income in cash, and the other 90% in a low cost SP500 index fund like this one.
Second, though…we have another favorite investment of mine, and this is definitely where almost ALL of my money goes at this point…and that would be Real Estate
Now, this type of investment is INSANELY more intricate, time consuming, and risky than just going and buying an index fund and then doing nothing…but, the returns I get from this are so much higher, and when you really know what you’re doing – you have the potential to make a LOT of money.
When it comes to myself, my investment strategy really just boils down to this…so, here’s my entire blueprint:
1. Buying an undervalued property that I can get at a good deal on
2. Buying that property in an area that I’m expecting will go up in value over the next 10 years
3. Get a low interest, fixed rate, 30 year loan on the property
4. Renovate and fix up the property so it’ll be worth even more by the time I’m done with it
5. Rent out the property, and the rents should cover all of my expenses plus profit
6. Repeat this same process and do it over and over again
HOWEVER….there are some downsides to doing this, because like I mentioned…returns like this doesn’t come without risk: it’s a lot of work, there’s a high barrier to entry because you WILL need a good credit score and sufficient income to get a loan from the bank, and this type of investment is fairly illiquid. Plus, dealing with tenants isn’t for everyone.
Third, would be INDIVIDUAL STOCKS:
Now, admittedly…this isn’t something I do often because I believe, overall…index funds are better for the majority of investors out there. However, I do dabble buying individual stocks every now and then. Now, I wouldn’t go so far as to say that picking individual stocks is riskier than buying real estate – it’s certainly not as time consuming, and the upside CAN be even better – but, the likelihood that you’ll lose money, long term, is also just as much present.
BUT, individual stocks can be a great way to invest if you have the interest in going for it – and don’t lose as much sleep as I do checking prices constantly.
Fourth: HIGH INTEREST SAVINGS ACCOUNTS: https://youtu.be/F2yYiTKRizE
It’s ALWAYS a good idea to have cash sitting on the sidelines, either while you wait for the right investment to come along, if you need it to pay bills, or for your emergency fund in case anything happens. Even though it doesn’t make a ton of money, and it’s really just on pace to match inflation – at the very least, my sitting money is making SOMETHING.
Fifth: INVEST IN YOU
This might come in the form of buying a book, or traveling somewhere just to be able to meet someone I could learn from. It could be an investment of time to gain a new experience, broaden my perspective, or see a different point of view. Not all investments have to be money-related, and in terms of what will generate the biggest return – whatever you invest in yourself will generally get the best outcome.
I also consider it a smart idea to re-invest in yourself, in ways that make you genuinely happy.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
*Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available.