Many of you have long term holdings in your portfolios. You may be investing for your eventual retirement or you may just like to invest in products with long term growth prospects. Nevertheless, the buy and hold investor, or passive investor could be leaving some returns on the table. Today I want to use a simple analogy to show how you may be able to improve on your long term returns.

Think about how many holdings you have in your long term account for a second. Now let's pretend that those are pieces of real estate. Single family homes if you will. So I will pretend that I have 5 holdings in my long term account. So I would pretend that I have 5 homes as my long term investment. Here's the question, what would the next step after purchasing those properties be? Aside from making minor changes or improvements your answer would be to find someone to rent them right? In real estate we are trained to buy a property and find a tenant so we can start generating income. For some reason when we invest in the markets we are taught to buy investments and then just hold on to them. Would you ever buy homes and then just hold on to them, leaving them vacant?

Ok, back to your market investments. You can take the same approach with your long term investments. While you hold on to them you can let someone pay you to essentially "rent" them. Over time you will hopefully see the appreciation in your position, but while you wait you can collect "rental" income along the way.

Now you should know that this is not some trick. Have you heard of Warren Buffet, or Berkshire Hathaway? Of course you have. Mr. Buffet , the famous billionaire investor does this exact same thing every day, just on a much larger scale. So consider improving upon your long term investments and treating them like real estate.