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Most people wonder when it's worth investing in money that they can't touch for a year or more. When it comes to investing, the term liquidity is fundamental, an essential characteristic for building your portfolio. Check it out below.

When it's worth investing money you can't touch for a year or more

There are some investments in which the shareholder cannot touch the money for a year or more. This begs the question: when is it worth investing in money you can't touch for a year or more?

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However, when it comes to investing, the term liquidity should be considered by all investors. This term is important when putting together a portfolio, as it indicates how easy it is to turn investments into cash. 

In this sense, investments can have high liquidity, as is the case with savings accounts. This means that investors can withdraw their money at any time. On the other hand, when investments have low liquidity, it is difficult to withdraw the income whenever you want. 

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As well as liquidity, investors need to assess the minimum investment time, as this also affects withdrawals. In short, there are many factors that affect the liquidity of an investment, and knowing them is essential for any investor.

Why take money out of your current account 

In general terms, when people leave their money in their current account, it's like they're keeping money under their mattress. After all, inflation can compromise purchasing power, as the money doesn't earn enough without some kind of monetary correction. 

For this reason, expert investors suggest taking the money out of your current account as soon as possible and investing it wisely. This is even more important in times of high inflation. 

Consumers should get used to leaving only the money they are going to use in their current account. That's because when your funds sit idle for too long, it can be difficult to achieve your financial goals or take longer than you intend to get there. 

So if you want to avoid this, it's important to invest your money so that the return is above inflation. Even if you don't have a clear goal with the income, it's still a good investment. 

In order to plan financially, investors should invest their money in products that match their investment profile. In short, the investment will pay off, as long as it has been studied calmly. 

Currently, savings accounts are not the best choice for those looking for a return, but there are investments that are just as safe. It's worth noting that its yield often loses out to inflation. 

How long-term investments work

The definition of long-term can change greatly depending on an investor's risk profile. What's more, investors can readjust their long-term vision from the moment they receive an analyst's recommendation. 

In this sense, there is no single answer to defining long-term figures. This means that investors should not cling to existing definitions of these terms, whether they are one year or more, as they are variable. 

Normally, the longer the investment lasts, the better the returns, thanks to compound interest. According to analysts, the long term involves more portfolio management than actually thinking about the figures for that period.

In other words, investors can invest for a year, but extraordinary performance can happen in a month. On the other hand, those who follow the Buy & Hold strategy tend to apply the concept of the long term when purchasing shares. 

In short, most people who invest for the long term are thinking of building a foundation for the future. This means that these investments come with the aim of achieving something by increasing their assets.

It's worth investing for the long term

Long-term investments are worthwhile. The great motivation for people to invest over longer periods is to make their dreams come true. After all, not everyone is born in a golden cradle and has to struggle to achieve financial goals, whether it's going on a trip, buying a house or a car. 

To achieve these goals, people need to work hard and have good financial control. In this sense, long-term investments can help investors, whatever their goal. 

However, it is essential to have focus and discipline, especially if you don't want to give up halfway through. People who stay focused are able to achieve their goals, even if the journey isn't easy. 

In the end, the feeling of achievement is gratifying, which is why long-term investments are worthwhile. Another important feature of this type of investment is the power of compound interest. 

Most people are familiar with this force, but in a negative way: the snowballing that can happen when credit card debts are overdue. On the other hand, this interest can also be good news, especially for those who invest wisely. 

If you invest R $500.00 in a product that earns 10% in interest per month and lasts for a year, for example, you would have a return of R $1,569.16 after the period. The reason for this is simple to understand.

Over time, compound interest doesn't just act on the initial amount invested, but also on past profits. However, this is just one example of what can happen. This means that when investing, investors need to evaluate the product's characteristics. 

In other words, the yield may not be the same as the rates offered, but quite different. It's important to note the following: the longer the money is earning, the better the results will be in the long term. 

Another advantage of investing for the long term is the possibility of paying less income tax. This is because some investments have regressive tax rates, such as direct treasuries and CDBs. 

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