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Sep 10
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Long Term Investment

Long Term Investment: A Test of Patience Promising Better Returns

Where to invest money is a mind-boggling question. There are many doubts that come to the mind while making an investment decision. Should one go for safer options like Fixed or Recurring Deposit or should one try hands in stocks and equity? What should be the criteria to select the right investment option?

Experts suggest that the investment should be done in a planned and disciplined way. It also depends on one’s age and investment goals. The longer one invests the higher are the returns due to multiplier effect. Making regular investments help individuals to save better and more. People usually chase a higher rate of interest and shop around different instruments. It is always advisable to stick to a plan (since frequent changes in investment philosophy always results in reduced returns) with consistent investments to build a long term corpus. In order to prepare the investment plan you may consult an investment advisor or read through various investment advisory blogs.

Before investing your money it is better to consider the following points:

  1. The rate of interest depends on market fluctuations and you can’t control it.
  2. It is always suggested to invest your money for a longer period of time, short time investments may not bring you higher returns.
  3. Always stay committed to your saving plans and don’t leave them in midway.
  4. Invest with a trusted investment avenues only
  5. Do not get lured by attractive returns marketed by unprofessional companies
  6. Make smart decision and consult financial planners for better investment options  

Why not have a look in a table describing the investments made by 4 customers falling in the different age groups for the same term.

Age Monthly Amount Invested Amount Term Returns (approx.)
20 1000 480000 40 98,00,000
40 1000 240000 20 11,00,000

Let us consider one example to understand how investment schemes work best at the age of  longer term. If you invest Rs. 1000 every month at 12 percent interest rate, at the age of 20 till the retirement, then your return would amount to Rs. 98 lakh (approx). On the other-hand if you invest the same amount at the age of 40 then your investment period will be less and so will be the returns. The market might run bulls and bears in short term but it benefits the best in long run. There is indeed a big difference in the returns between the two terms.

The invested money compounds and grows big only in the long run. There is another interesting side of investment strategy. If you pay an amount for a short period and do not liquidate the amount it will still compound and give returns. The fundamental theory is simple that you invest regularly and invest for a longer period of time. The rule of compounding benefits the investor.

Chasing higher rate of interest is never a wise idea. Rate of interest depends on market conditions so the investor should focus on what he/she can control. Controlling the rate of interest is not possible but one can have a futuristic vision and planning. Those who want to invest for a short time and do not want to take much risk then they should invest only in the fixed deposits. The downside of such investment is that the returns from the investment are fixed and low.     

Everyone desires that his/her money is put in the right investment plan. The higher rate of interest attracts people to invest but to churn out the desired return one needs to be patient and regular with the investment. Higher returns do not get materialized in short period. On the contrary, a long-term investment is a test of your patience and time. 

Because a long-term investment plans yields a very good returns on investment, benefit of tax, security of investment, it is indeed one of the best sources for the safe investment.

Thus, every individual concerned about his/her happy retirement, higher studies of children, marriage of children, and other purposes should definitely start early the regular monthly saving in a long-term investment source in the market. The joy of enjoying compounded benefit is limitless. Today, an investor can easily explore online for long term investment options 24×7!

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