In the quest of financial security, Everyone seek the best way to have to care for oneself and dependants. There are really many ways to do this optimally but some did not secure our finance in the future.
One of the best options was to set aside some fund for future. Those funds set aside are not idle but a tool itself to make more money. This approach is the simplest way of explaining what investment is. But in what avenue, should our fund be invested to gain more? Many have many options and it is in several terms to yield. In any venture decided, a long term investment is very beneficial. Lets talk about them;
Compounding Interest
For a detailed explanation and mathematical calculation of Compound interest, kindly consult this postHERE by astute author, @fokusnow. But in a nutshell explanation, The profit from the principle/capital invested over time is the interest. Do you know that this interest can be summed up with the pervious capital thereby serving as a new principle/capital will be used for investment over a period of time for yet another interest. Its like a chain reaction and the interest keep doubling over time.
This is the major advantage of long term investment over shorter ones. The interest can generate more profit over time. Long term Investment reinvests the dividends for greater profits. Only wealthy people understands this and cultivate the patience to indulge in this best form of investment.
A good example of Compounding is what the savings on HBD on hive do.
In the picture above, you can see the 20% APR which means that 20% profit return of any HBD saved annually. The best part of this long term investment is that the dividend will be added up and increase the the number of HBD regularly.
LOW TAXATION
Taxes are mandatory fees paid from the profit earned honestly. Since many long term investment yield very low profit at a moment which when left for maturity over the years can be huge profit, judged to pay lowest form of taxes.
In short term investment with 57% interest will pay taxes of same percent compared with long term investment of 3% over 33 years of maturity. This is simple fact about long term investment and its advantage.
LOW INVESTMENT RISKS
In land estates, the rates of depreciation is very low and its a form of long term investment. The risks involved are low and less expensive than highly sought short term investment which is full of risks but higher yield.
Many people wants their investment to yield faster and higher, reason why they lurked around short term investment and get scammed. I can remember personally on several ocassions that I have been scammed, they are forms of short term investment projects. This does not mean that there is no scam cases on long term investment but its highly lower than in short term investment projects.
Engaging in the power up exercises like Lpud can be a long term investment projects for many like me. With no known investment risks but if there is, it will be very low.
Best Financial Decision
Can we say that long term investment is the best financial decision? Its not for me to answer because being the best is very relative. A good and best financial decision for me might not be for another person but judging from the pervious points raised earlier, I will concluded that its a best financial policies for many people. Who are those people?
Many people works so hard but in the retirement age, it became dependants and their money gone. In a sane countries, Pensions will be competing with mortages and little or low money for their upkeep. Long term investment projects can be their saviour and I know many of those senior citizens that are enjoying because the dividends from investment in real estates keep them living.
Another example, I just found out that many top earners on hive are retired people who invested in crypto projects. Good crypto projects like Hive, Leofinance etc which divdends keeps compounding over the years is a saviour and best decision ever.
EMOTIONAL SECURITY
After careful examination and investigation on several investment projects, long term investment gives inner peace for investor than short term whose volitality are very high. With short term investment which can not be predicted, makes one uneasy and unstable.
Market trends are unrealistic and changes rapidly, short investment promises fail abruptly unlike long term investment where the changes are not pronounced and its dividends over a long period of time can recoup the losses if any making its investors to sleeps happily and enjoyable.
The long term investment portfolio are adjusted with zero chance of losses. In crypto, The investor advised to chose tokens of high profits returns and stable coin in his kits. The presence of the stable coin will be balancing the equation while the high profits tokens will be increase the rate of dividends of the investments.
Leo Power up day
Today being 15th, I participates on the power up exercise with 975 leo token invested.
Currently, I sit with over 3k Leo Power with great potential of increase. My goal for the year is 10k Leo Power so gradually I will achieved that happily.
With these steps, I powered up these token.
Step one
Trying to use leofinance.io was not working properly, I used Hive keychain app. Log in and click on leo token for staking as shown below.
Step Two
Type in the number of token to staked 975 and click on staked.
Step Three
Boom! 3005 leo power was displayed. Congratulations. The power up exercise is done successfully.
CONCLUSION
Investment whether its for short or long term have benefits and demerits. Its a best financial policies to invest funds for the future gain. Long term investment have numerous gains as listed above and more but demerits abound too. Maybe next post, we will talk about them.
