"What should I invest in?" is a question that bothers many remote workers who have extra money or extra income want to take advantage of.
We live at a time, where the number of investment opportunities is larger than ever.
From companies like Nexo, who is paying you interest on your FIAT currency or Cryptocurrency to a marketplace like Empire Flippers, reviewing profitable websites for sale, to crowd-investing platforms like Crowdestor, reviewing businesses looking for loans. These opportunities are added to traditional investment opportunities, such as the stock market and real estate.
So, how do you decide what you should invest in with this wide variety of options?
We’d all like to tell our friends: “I made a good investment today” or: “The stock I bought last week went up 50% today”. As much as it feels good talking about it. These events are nice to talk about but unrelated to what you should be really looking at: Long term returns.
The reason that long term returns are important is that you need to think of these as opportunities to reach your life and financial goals. It’s what I call “Life Goals Guided Investing”
If your financial goal is buying a house in the next year or so, investing the money in high volatile stocks is not the right way to go. Yes, the stock can go 50% up in a single day, but it can also drop significantly.
It goes the other way too: If you are saving for your child’s college tuition in 18 years (yes, you should start when they are born). It doesn’t make sense to put it in 0.5% yearly return bonds. The reason is that some markets over time give a steady return of 7-10% on average. Yes, they can be volatile, but over 18 years, it doesn’t matter as much. You have many years, to enjoy the market growth.
Remote workers have a benefit that others might not have, increasing the number of investment opportunities they have. Many times, they can move to a new place that action alone will influence a lot of their finances. They can save more and as a result invest more. On recent research, housing takes around 33% of a household expense
So, when a remote worker thinking about what to invest in and how much, two things can help you make the decision:
1. Think long term and have a long term guided investing or in other words build your vision.
2. try to increase the amount you save by using the fact you can work from anywhere. Move to a cheaper place, even temporarily. In the long run that will pay off substantially.
Looking to build your vision and find out what you should invest in? Check out this worksheet to move your forward.