What is Your Best Long-Term Investment?

In order to evaluate where to invest your money for the best return on your investment, there are three main categories to consider: first, normal, passive type investments, second, real estate and third, business.

-TYPICAL INVESTMENTS-

There are a number of typical investment vehicles: bank accounts, stocks, bonds, commodities, mutual funds, gold, etc. The stock market has typically been a good solid investment vehicle over the past fifty to sixty years. For the very long-term there are very few vehicles that have done as well. Over the past 50 years the stock market has averaged 11% or 12% growth per year depending upon which study you look at. For this example, we will take the best consistent long-term investment, the stock market at 11% compounded annually.

Amount Invested Rate of Return No. of Years Value of Investment Return on Investment

$30,000 11% 10 $85,182 11%

-REAL ESTATE-

Real Estate is categorized as a business rather than an investment. There are a number of considerations in Real Estate like, rents to collect and expenses to be paid, which we will not consider here.

Assume a purchase of properties valued at $300,000 at a breakeven cash flow

Down Payment Growth Rate No. of Years Value of Investment Return on Investment

$30,000 4% 10 $444,073 68.8%

Less: Value of Mortgage (Amortized) = -$237,600

Net Increase in Investment = $206,473/10 years

= $20,647 gain per year / $30,000 investment

(Downsides: What happens if it doesn’t cash flow properly, or property values go down, or you can’t rent it, etc.?)

-BUSINESS-

Type of Business Out of Pocket Typical Income Success Rate/Odds of Return on Investment if Successful Survival After 5 yrs Investment

Direct Sales/MLM $4,000* $50,000 6% 75%

Start Typical Business $40,000 $50,000 20% 25%

Buy Existing Business $50,000 $50,000 60% 60%

Buy Franchise $32,000 $50,000** 92% 143.8%

The bottom line is that franchising is almost double the return of the closest vehicle. The only consideration is the amount of time you can devote to the franchise and which franchise is right for you (there are over 4,000 franchises to choose from).

Also, consider that if you take just half of your franchise earnings and invest it into the stock market for ten (10) years, you would have a total of $417,632 to add to the other half of your franchise earnings. This would make a grand total of $642,632 or a 214% return on investment and you still have an asset (the franchise) that can be sold!!

In addition, remember that franchises are easier to duplicate, therefore making it easier to get a second or a third location. With additional locations, your earning power and net worth will grow even faster. Franchising is definitely the best opportunity.

NOTE: These results do not take into consideration taxes

*Investment over a five-year period

**This amount is not an earnings claim but is used as an equal comparison to the other business types

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