Most of us the people nowadays are into investing ranging from cryptocurrencies , stocks and real estate. However, most people go to investment without prior knowledge about what they are investing and end up making losses. Just because you are seeing people posting their investment success stories on social media , it does not necessarily mean you should also copy them.
In a current interview , several millionaires were interviewed to uncover how the rich acquired wealth, where they invested money, and how they viewed finances. The findings of these interviews blew the mind of many people because the research brought to light how several millionaires live amid working-class people and blend in with society.
When the interview was over researchers found that a large percentage of wealthy people:
- Purchase used cars and go with them for years.
- Don’t invest in things which are not assets.
- Invest their money wisely using a single shared investement.
Some of the popular investment strategy used by billionaires:
Buy and hold it for long term
Instead of buying low and selling high like investing genius Warren Buffet once said, your long-term investment strategy can be even easier than that: Buy low, never sell. Research documented from the book “The Millionaire Next Door” suggest that the majority of millionaires never sell their assets. Whether it’s stocks, bonds, real estate, or any alternative asset — one thing remains consistent: They don’t ever sell.
“Well, the question now is how do you make money if you never sell off your assets?” Meanwhile, it should be noted that “buy and never sell” is a bit of an extreme exaggeration. It’s not that these millionaires have never sold an asset, it’s just that they held onto their assets long into the future.
A millionaire with the buy-and-hold investing strategy would tell you differently. Unless you need the money for something important like a bigger investment or sending your child to college, why sell those bitcoins?
It’s not like more are ever going to be made. The more those older packs disappear, the more their value will rise. Hence making you more money on your investment.
This strategy works with more than just alternative assets. It can be applied to stocks, bonds, real estate and more.
Everything must rise eventually
Ranging from index funds to bonds and real estate value, everything rises in value eventually. It might not happen this year or this decade, but if you hold onto the ownership of an asset for long enough then you’re bound to see it rise. Approaching every investment with the mindset of buying and holding will turn you into a more profitable long-term investor.
Observer diversification
Afterwards the millionaires in “The Millionaire Next Door” reported that they hold their assets and never really sell them, also they admitted that their million dollar portfolios were still diverse.
The book says the millionaires interviewed stuffed their money mainly in:
• Bonds
• Index funds
• Real estate
• Precious metals (Gold, silver, etc.)
Taking this into account that this book was originally written in 1998, it’s understandable how bonds made this list. These days, bonds see such a low return that you might want to consider an alternative investment.
Conclusion
It’s surprising more people don’t play the long-term investing game. It’s historically proven to work in the past and anyone can see it just by looking at a 5-year growth chart of any asset.
Whatever the investment, after a long enough time they will all eventually go up in value.
