Set For Success – 6 Tips For Crafting A Successful Long-Term Investment Strategy

Whether you want to save for retirement or simply enhance your financial situation to live a more luxurious existence, developing a successful investment strategy won’t happen by itself. You don’t need to be a financial whiz or even a real estate expert, but you will need to work hard at it. To help you in that regard, here are several tips for crafting a successful investment strategy. 

1. Identify Your Goals

You can’t travel down the path of success without knowing where you’re going. Before beginning, you need to figure out what your goals are. For example, if you’re investing in property, do you want to take the fix-and-flip route, or are you more comfortable with a steady stream of income from rental properties? Consulting property investment advisors can help you identify your goals by offering expert advice and recommendations. The same is true in all fields of investment. 

2. Know Your Options

You have many options available to invest in your future. From the retirement plan with your employer to IRAs, real estate investing, and more, you can build a diverse investment strategy that fits your lifestyle and goals. Do some research, figure out which investment opportunities will be the best match for your goals, and try to find a mentor or advisor who can show you the ropes. 

3. Pay Yourself First

Many people wait until the end of the month after all the bills are paid to see how much they have left to invest. If you think of your income as your biggest wealth generator, you’ll understand why it’s best to put your investments first rather than waiting to see if there’s any money left for them. 

Whether it’s automatically investing in a 401k or transferring cash from checking into savings to fund a future real estate investment, pay yourself first to keep profits coming in from your investments. 

4. Diversify Your Investments

Diversification is going to protect your money. If one type of investment isn’t generating the income you need, another type will pick up the slack. Setting things up this way means you’ll never be at a total loss. 

For example, a 40/40/20 strategy is great when it comes to real estate investing. For this to work, 40 percent of your investments can be in fix-and-flips, while another 40 percent could be put into single-family rentals. The last 20 percent can go toward higher-risk investments that garner bigger payouts. 

5. Invest Consistently

You might think that when the market is down, it’s best to sit tight and not invest in any new ventures. The exact opposite is true. In real estate, when the market falls, it’s the best time to purchase new properties as you can usually snap up the best deals. When the market finally recovers, your cheap investments will be worth more, meaning they will also be able to earn you more rent than before, putting you into a much wealthier position. 

6. Don’t Micromanage Your Investments

It’s always fun to watch your investments succeed, but obsessively checking your profit margins and bank accounts every day is a big no-no. Investing is a long-term game, so there’s no need to check on them all the time.

Make a point to check on your passive income generators a couple of times a year, and resist the urge to check on them more – all this is likely to do is increase your stress levels. 

Crafting a successful investment strategy doesn’t happen all by itself – you must work at it. Hopefully, the tips above will help you do just that.

Photo credit: Morgan Housel / Unsplash