Do you know Warren Buffett? The Second Richest man in the world with over $66 Billion net worth.
The second richest man in the world with over $66 Billion net worth.
For many, he is the greatest investor of all time, generating almost 20% a year thru his company, Berkshire Hathaway, which he acquired in 1965.
He is known as the Father of Fundamental analysis together with Mr. Benjamin Graham, a strategy being used when investing in the stock market.
Moreover, he is an advocate of the “Buy and Hold” strategy. He buys at its cheapest price and holds it for the long term to maximize profits.
Sadly, people nowadays don’t want long-term wealth accumulation. They want instant money and gratification. They want to be rich now! This is one of the reasons also why many fall into scams.
But in reality, you can’t get rich quickly in the stock market unless you are both extremely foolish and also extremely lucky. But what you can do, if you are smart, is generate a reasonable amount of multiple income streams while you are building up a retirement nest egg that will cover all of your lifestyle expenses after you stop working.
And that is the reason why I am an advocate of this long-term stock market investing strategy. Focus more on creating income sources like businesses and invest them in the stock market for multiplication. For me, do not make the stock market your income source especially for your daily expenses.
Why Stocks? Stock Market is still The Best-Performing Asset of All Time!
Jeremy Siegel’s work confirms that to build serious wealth, you need to create—in addition to strategies that bring you shorter-term income and growth—a long-term strategy that takes full advantage of compounding.
Sure, let us invest in stocks but why long-term?
Here are the Five Benefits of Investing for the Long-term
1. Power of Compounding – I have discussed this so many times in my previous blog articles. Let me share with you its power based on the illustrations below.
2. Simplicity – Just buy monthly good companies for 10 or more years and you are all good. If you follow the SAM recommended stocks the better. Again, do it with simplicity and focus more on complicated things in your businesses and your other income streams.
3. Peace of Mind – When you invest in good companies and for the long term. You tend to ignore gossips and news. You are confident they will be there even if the stock market closes down for 10 years. I bet that your businesses or your workloads are already giving you headaches right? you want at least peace of mind in your investments.
4. Save on Fees – If you trade, either you gain or lose, your broker is richer because of the fees! They want you to trade and gamble! This is a big business after all. When you trade, what you pay for fees will surely erode your gains in the long run.
5. Conservative – It is risky to put all your money in time deposits, savings account, and money market because of inflation. In stocks, historically, you can beat inflation. Your money should grow more than it loses because of inflation.