According to Several Millionaires, There Is Only 1 Way to Invest
Everything goes up eventually
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.
This can recently be seen with Bitcoin. Many people bought Bitcoin less than a decade ago when each coin was only worth between a few hundred to a few thousand dollars.
If they would’ve had the millionaire mindset of buying and holding, more of those same initial investors in the cryptocurrency would have seen a ridiculous return on their money once BTC started to rise into the range of tens of thousands of dollars.
But the real question is: Do you sell once you watch your $500 Bitcoin turn into a $40,000 coin?
According to the strategy of most millionaires, it would be best to hold onto it.
Approaching every investment with the mindset of buying and holding will turn you into a more profitable long-term investor.
Diversification is still king
After the millionaires in “The Millionaire Next Door” reported that they hold their assets and never really sell them, they also admitted that their million dollar portfolios were still diverse.
The book says the millionaires interviewed stuffed their money mainly in:
- Index funds
- Real estate
- Precious metals (Gold, silver, etc.)
Taking 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. Possibly crypto or a hobby like Pokemon cards.
Playing the long game has worked in the past
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.
Whether it be real estate, index funds, or even Pokemon cards, after a long enough time they will all eventually go up in value.
Yes, it can be extremely enticing to see people making millions by selling NFTs but the truth is that’s not a proven long-term asset. If it looks like a fad and feels like a fad then it’s probably just a fad.
However, proven long-term investments like real estate and index funds have decades of history backing them up.
Buying an asset that will inevitably go up and never selling it is how millionaires become wealthy, remain wealthy, and transfer wealth to the next generation of their family.