Did you know that right after receiving his first share of the proceeds from
zip2 elon musk immediately invested in two businesses and now that he's rich he
has countless other investments most of which have contributed to him becoming
one of the world's richest men if you didn't already know the life of the rich
is more or less about investments to some it's not even about making more
money it has become a way of life for them and in this video i'll be sharing
with you five investments rich people own for life and if you're new to the
channel then hit the subscribe button below for more life-changing content
investment number one index funds the index fund can be categorized along with
etfs or exchange traded funds and mutual funds an index fund is an investment
holding a specific group of securities in an index the aim
is to match the performance of that benchmark closely you may purchase index
funds via an index fund provider like vanguard or blackrock or your brokerage
account among the primary advantages of index funds is their track record of
consistently beating the other fund types in overall return the primary
reason for this is because generally they have management fees that are lower
than other funds the management fees are less due to the fact that they are
passively managed rather than stationing a manager actively trading with the
research team continuously making recommendations and analyzing securities
the portfolio of the index fund gets to duplicate that of its designated index
the index funds also have lesser transaction costs since the index itself
rarely changes these lower costs that are available with index funds can over
the long haul make a massive difference in your returns with all the advantages
of owning an index fund shown earlier it's already clear why the rich are keen
on this investment however there's more by less frequently trading in and out of
securities as opposed to actively managed funds the index fund experiences
less events that will have your investment being taxed meaning that this
is also an investment that will minimize your tax owings finally index funds
employ one of the most important rules of investing which is diversification by
investing in index funds you can invest in a group of stocks you admire without
having to invest in each one individually which gives the average
investor a way to diversify more easily therefore for these reasons and more the
first investment rich people own for life are index funds investment number
two high yield dividend stocks high yield dividend stocks are another
investment the rich cannot do without dividend stocks are the money that
shareholders hold as passive income dividend stocks come with two primary
means of profits growth and a high dividend yield will growth stocks have
to do with earnings that are constantly growing high dividend yielding stocks
may not always increase continually however they disburse dividends earlier
the earnings from high dividend stocks come at rates that are typically higher
than the market average now while many popular dividend stocks offer investors
sizable payouts shareholders frequently reinvest those dividends this is
beneficial to everyone involved including the company and the investors
those who reinvest their dividends are very helpful because they kill two birds
with one stone how such reinvestments help to acquire relatively inexpensive
shares if a stock stays at a relatively low point they also help to slow the
downward momentum of these shares the rich you like to invest in these
instruments have the opportunity to sign up for dividend reinvestment plans they
can also manually invest their dividends at the time of entry but how did the
rich know which high dividend stocks to invest in well i'll show you in this
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investors begin by comparing the dividend yields with their peers once an
organization's dividend yield is way higher than the ones from companies of a
similar stature that usually signals a red flag if anything the investor has to
conduct more research on that company to ensure safety however once reliable
dividend stocks are found they're typically a lifelong hold
investment number three real estate real estate investments are quite popular now
and this isn't surprising given all the benefits they offer once an investor can
carefully select profitable real estate to invest in he or she will read
bountiful in terms of diversification tax advantages excellent returns and
predictable cash flow for these reasons and more the rich generally leveraged
real estate to build wealth now let's dive further into those benefits i
previously mentioned real estate offers a lot of benefits and quite minimal risk
and as such is considered an investment anyone who desires well should own allow
me to show you the reasons behind such conclusions the cash flow generated by
real estate is one of the reasons rich people love it cash flow is the net
income that a real estate investment generates for an investor after
operating expenses and mortgage payments are subtracted the cash flow produced by
the investment is often strengthened over time as the investor pays down the
mortgage and then builds up equity another benefit of real estate is the
tax deductions and breaks it offers you a person that invests in real estate is
usually open to numerous tax deductions and breaks which helps to save money
during tax time generally a person can subtract the reasonable expenses of
managing operating and owning a property another real estate's investments
benefits is leverage leverage can be defined as borrow capital which is debt
or different financial instruments to improve the potential return from an
investment for example a mortgage down payment of 20 may get you a hundred
percent of the intended house that is leverage real estate is one tangible
investment that can be used as collateral and it makes getting
financing easier moving on real estate investments can also offer an investor
competitive risk adjusted returns the return from this investment vary based
on factors like management asset class and location however the aim for most
investors is to beat the annual market returns and very few other investments
can provide the kind of risk-adjusted returns that real estate does another
benefit is an inflation hedge an inflation hedge is an investment that
protects its investors from a decline in its money's buying power the inflation
hedging capability of real estate comes from the relationship between the
positive demand for real estate and gdp growth the demand for real estate
generally drives rents higher as economies continue to expand which leads
to higher capital values in that way real estate helps to keep the buying
power of your money bypassing the pressure from inflation to tenants these
are the main benefits real estate and part of the reason why it's arguably one
of the best investments around investment number four government bonds
in the world of investors government bonds are still as important as ever for
many years people have been made to believe that stocks are the best
investment instrument for growing your wealth you see until today this
sentiment persists even after the advent of two major crashes in the stock market
however people who downplayed the importance of bonds are missing out on a
potential cash cow and you guessed right the rich are not missing out on this
opportunity of course you want to know what gets the rich so excited about this
particular investment and you can be sure that i'll do it justice in this
video firstly government bonds are a viable way to provide income although
multiple investments offer some kind of return to investors bonds generate a
dependable money stream even when the prevailing rate in the market is low
there is still a number of options for investors to construct an effective
portfolio these options include emerging market debt and high yield bonds another
benefit of government bonds is their ability to offer investors
diversification as a popular warning for investors goes don't put all your eggs
in one basket employing bonds is a vehicle for diversification for those
who are smart enough to adhere to that time-tested wisdom it is of utmost
importance for any investor to be protected against market volatility and
this is where government bonds come in they offer a low risk profile that when
paired with stocks can ensure that an investor's portfolio is protected from
massive declines when the market takes the dip finally one of the biggest
advantages you get investing in government bonds are the tax advantages
they provide there are very few things that the rich
hate more than taxes after all it's not their fault that they want to have
wealth and know how to get it bonds are useful to people who want to minimize
their tax burdens while most equities and money market funds are taxable at
the federal level that is the interest on government bonds is tax free so
between the diversification they offer and their tax advantages this is another
investment you should definitely own for life
investment number five precious metals investing in precious metals such as
silver or gold means the exchange of legal tender and lawful money it is
trading your local currency for an international currency or exchanging
public money for private money people can always obtain silver or gold for
cash which is just one of the many benefits of investing in precious metals
for sure but what are some other benefits well another is that even when
a person buys jewelry these precious metals still hold some real value due to
their purity and weight therefore even if nobody wants to buy the precious
metals jewelry the seller may take it to scrapper coin dealers and get paid to
melt down the value of their metal now you may be wondering how much of your
investments should be in precious metals and it's a great question that i want to
answer now generally financial advisors recommend that you invest between five
and ten percent of your cash in this particular asset and a little bit later
in the video i'll convey to you some of the specific wealth principles that
outline the wisdom investing in precious metals firstly unlike most other assets
out there precious metals are hard assets that hold real intrinsic value
yes paper cash and plastic assets will make your investment life convenient and
steady economic times however when the market gets volatile as is usually the
case during a recession hard assets are the real deal precious metals have a
history of not only providing security during volatile times but offer the
biggest returns immediately after the rich understand that in the global
economic times we're presently in the business and political landscape is
quite volatile keeping that in mind you should join the rich in protecting
yourself by investing in precious metals investing in paper intangible assets
like cryptocurrency should be considered as potential wealth by this i mean
assets like that only become wealth after you've successfully traded them
for hard assets services or even goods also investing in precious metals is not
only a secure investment but an excellent savings method the fact is no
other asset can provide constant owner accessibility consistent returns high
liquidity and a solid savings mechanism to you as an investor getting a good
return from your investments in soft or paper assets is generally predicated on
making savvy gambles for long-term investment decisions therefore if you're
someone who doesn't like having to wait years to reap the rewards and doesn't
have the stomach for risks precious metals are the real deal another benefit
i must point out is that precious metals are widely regarded as an investor's
best inflation hedge when you understand that the dollar loses a minimum of two
percent in value every year you probably stop saving altogether and invest in
precious metals instead therefore for these reasons precious metals can make
another prudent investment for life thanks for watching if you want to go
from the life you have to the life you deserve then hit the subscribe button
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