Is Investing long-term the Only Way to Grow Wealth?

  • Fixed Income Investments, Investment Basics, Personal Finance
  • 2 min read
  • Jiraaf
  • May 5, 2022

‘Time is equal to money’ – we must have come across this one-liner as a dialogue in movies. That would be a cool way to say ‘you are/that work isn’t worth my time’, right? But, time and money are intertwined. In fact, they go hand in hand when we are talking about investments.

[Before we move ahead, answers to all questions start with ‘it depends’ when it’s about investments.] 

Money is money, be it for the short-term or long-term. Or, is it?

Like a philosopher once said, “A seed grows with no noise, but a tree falls with huge noise” – which basically means things take a lot of time to grow but downfall takes only moments. In terms of investing, preferring short-term investments is like plucking fruits from a tree whereas long-term investing is similar to watering a seed till it grows into a deep-rooted, healthy fruit-bearing tree.

Short or long, it all depends on ….. 

Building wealth that lasts long takes a long time. More than money, it’s a matter of patience.

The investment horizon depends on the goals of the investor. For something like buying a new car or a bike, short-term investing is enough. For children’s education, the long-term makes more sense.

Not everyone can start investing early. Reasons could be several but, when invested in the right products, the returns lost out due to starting late would be more often than not made up. So, invest even if you are ‘late to the party’. For some inspiration, here’s the story of how a person who started investing in his 50s became the world’s richest person.

If an investor is aiming to make some returns or trying to meet some needs for certain expenditures in the months to come, then it’s sensible to pull out the money when their target is met, i.e., invested money has grown to their expected levels. If one has surplus funds which they are very much unlikely to use in the foreseeable future, staying invested makes more sense.

One person’s short-term may be another’s long-term

Yes, read the heading again and don’t forget it. One may have expenses on a regular basis that makes it not possible to lock away the money for years in the name of long-term investment. For others, say those who are investing for their post-retirement life, staying invested makes sense.

And finally, it is not wise to consider any established theory, even if it is tried & tested, on face value when it’s about money – your money. How long one should stay invested is a personalized thing. It depends on …

Exploring all relevant options for your investments is necessary, and if you are looking for high-yield investment opportunities, do visit our platform here.

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