If you’re an investor, you might be feeling apprehensive in the economic climate of the day. It seems as through risk – and expenses – are constantly on the rise. You might wonder if it’s even worth it anymore!
We don’t blame you for being bummed out. There are plenty of reasons to stress, which is why you shouldn't let your investments be one of them.
You could be worrying about interest rates, the stock market, inflation, and making the right moves at the right time. Or you can adopt the mindset that creates lasting success.
5 Advantages of a Long-Term Investment Mindset
Benefit #1 – There’s less guesswork
If you’ve got it in your head that you need to be able to time the market, you’re going to run into a plethora of problems. First and foremost, you’d better be clairvoyant. Knowing which market or stock is the next big thing is tricky and you’ve got to get in on the ground floor if you’re going to ride the wave of success. At least, you do if you’re looking for short-term gains. Unfortunately, if you miss your window, you’re out of luck.
A long-term strategy takes the guesswork out for a few reasons. For one, you’re not having to wait on some perfect moment to make your wealth. Instead, you’re looking at a history of trends that allow you to make incredibly informed investment decisions.
Benefit #2: You can focus on efficiency
If there’s one thing to know about the long game, it’s this: details matter. As an investor, you’re not an opportunist: you’re a strategist. You’re after investments that will last, get better over time, and offer you the double benefit of cash flow and equity. This means, when we’re talking about real estate, that you want stable, reliable investment markets.
It also means you’re looking to maximize efficiency and cut down on avoidable costs, like those associated with turnover. If you can increase the satisfaction of your residents and incentivize them to stay longer through quality properties and excellent service, you can extend their average stay by years. That saves you the thousands of dollars it could take to properly prepare for a new resident.
A mind focused on efficiency, quality, and longevity means that you’re getting the absolute most out of your investments regardless of the surrounding economic circumstances.
Benefit #3: No need to stress the rough patches
Most of us have been through at least a handful of rough economic patches. Between the Great Recession and COVID-19, there have been smaller financial crises that may make investing more of a challenge – or a greater opportunity. If you’re stuck thinking only in terms of the present, of course you’re going to stress out! The present is stressful, and the future seems uncertain. When it seems as though the market as we know it is failing, remember everything moves in a cycle. Do your best to responsibly manager your assets as far as you can control them.
The bad times will pass. Today’s interest rates aren’t getting cheaper, and the dollar isn’t worth more than it was yesterday. That makes now the best time to invest and give your assets room to grow.
Benefit #4: There's room to wait
Time is the most valuable asset anyone can have. An investor holding to a short view of the market will waste a lot of time trying to find the right moment to jump in and jump out. Investments naturally become more profitable and more valuable with time. The earlier you can invest, the better. You want your portfolio – at least at its core – to be boring. Be content to wait and recognize that the long game reaps great rewards.
Benefit #5: Your big ambitions become attainable
Life is becoming progressively more expensive with each passing year. This is true not only in an economic sense but on a very personal, very human level. Thinking you have to get it all together right now leads to anxiety and impulsive decision-making. While yes, you should absolutely be proactive in shaping your financial future, you can rest well knowing that, in the big picture, in the span of time you’re giving your wealth to grow – you can make it.
Wealth isn’t built overnight. Wealth is built through a combination of time, expertise, and effort. Instead of banking on a “big win” to change your financial circumstances, you rely on stable investments that, in the end, will allow you to acquire more assets, compound your cash flow, and live the life you’ve always dreamed of.