3 Long-Term Investments You'll Thank Yourself for Later

Someone is sitting in the shade today because someone planted a tree a long time ago. --Warren Buffett  

Why settle for good results in your investments when you could get excellent results? No matter how you're managing your financial life today -- or your life in general -- you can probably do better if you make certain long-term investments. Here are three such investments you'll thank yourself for later.

Image source: Getty Images.

1. Invest in your brain

The best way to become a better investor is to become a savvier investor. The more you know, the smarter investing decisions you'll likely make. Here are some great ways to get smarter about the stock market:

• Read good books on investing, such as John Bogle's The Little Book of Common Sense Investing, Peter Lynch's One Up on Wall Street, Joel Greenblatt's The Little Book That Still Beats the Market, and The Motley Fool Investment Guide by David and Tom Gardner.
• Read good books on money and psychology, such as The Psychology of Money by Morgan Housel, Predictably Irrational, Revised and Expanded Edition: The Hidden Forces That Shape Our Decisions by Dan Ariely, and Nudge by Richard H. Thaler and Cass R. Sunstein.
• Read about great investors and how they think, in books such as Richer, Wiser, Happier: How the World's Greatest Investors Win in Markets and Life by William Green, The Most Important Thing: Uncommon Sense for the Thoughtful Investor by Howard Marks, and The Essays of Warren Buffett: Lessons for Corporate America by Lawrence Cunningham.
• Read articles at Fool.com, where you can find scores of them every day covering companies of interest along with many investing and personal finance topics.
• Learn how to make sense of financial statements such as the balance sheet, income statement, and statement of cash flows. Doing so will help you better understand how a company is really doing. If you want to get really good at it, consider taking a course in accounting, and if you want a deep education in security analysis, pursue a Chartered Financial Analyst (CFA) designation. (That could even lead to a new career!)

While you're learning, be sure to take note of common investing mistakes, so that you can avoid making them.

2. Invest in your health

Investing in your health may not seem like a way to get financially stronger, but your health and your wealth are related. For one thing, poor health can be very costly, potentially presenting you with hefty bills from doctors, hospitals, and pharmacies. It can cost you years of your life, too.

To aim to keep your healthcare costs (especially those you'll face in retirement) at a minimum, be good about eating nutritious food and getting or staying fit. The process of staying fit can be part of your financial education, too, as you might listen to good financial podcasts produced by smart people while you run or walk or cycle. (There are lots of good business podcasts and investing podcasts.)

Image source: Getty Images.

3. Invest in index funds

The two investments above will take some effort and perseverance, but they can be well worth it, strengthening your financial health and your physical health. Here's a third long-term investment idea for you, and a very simple and easy one: Park much or all of your long-term dollars in one or more low-cost, broad-market index funds.

If most or all of your investing is in index funds, you won't need to spend much time reading and learning about investing, because your money will simply be distributed across the same securities that are in the indexes that your funds track. You won't have to think about when to buy or sell any particular stock, because as companies are added to or removed from those indexes, your money will be moved in or out of them for you.

Index investing is hardly a compromise in investing, either. You might spend a lot of effort picking stocks and still not outperform the broad-market indexes -- indeed, many mutual funds managed by highly paid professionals underperform index funds. Even Warren Buffett has recommended them for most investors.

Some low-fee index funds to consider are the SPDR S&P 500 ETF (SPY 0.53%), Vanguard Total Stock Market ETF (VTI 0.65%), and Vanguard Total World Stock ETF (VT 1.16%). Respectively, they'll spread your dollars across 80% of the U.S. market, all of the U.S. market, or most of the world's stock market. You might dollar-cost average into them over time, investing a certain chunk of money at regular intervals. The table below shows what you might reap over time, if you average 8% returns annually:

Data source: Calculations by author.

Whether you act on one, two, or all three of these long-term investments, you'll likely be very happy you did, years from now. See which ones -- and their payoffs -- appeal to you.