What Is Investing?
Many people believe that investing is only for rich people. That is not true. It might have been true to some extent 15 years ago but things have changed. Companies and services have made it their mission to make investment options available for everyone, including beginners and those who have just small amounts of money to put to work. Now that we know that investing is available to everyone, let’s answer the question many people are still asking: What is investing?
Investing involves committing money in order to earn a financial return. This means that you invest money to make money and achieve your financial goals. In fact, investing is the best way to grow your wealth. Regardless of where you invest your money, you’re basically giving your money to a company, government, or other entity in the hope they provide you with more money in the future. People generally invest money with a specific goal in mind, such as, retirement, their children’s education, a house, etc.
Investing is different from saving or trading. Generally investing is associated with putting money away for a long period of time rather than trading stocks on a more regular basis. Investing is riskier than saving money. Savings are sometimes guaranteed but investments are not guaranteed. The choices you make with your money make a big difference. If you put $20,000 under your mattress, 30 years later you would still have $20,000. If you put $20,000 in a savings account at 2% interest, 30 years later you would have $36,337*, If you invested $20,000 in an account at 5.48% interest, 30 years later you would have $99,113*. That’s why people choose to invest. The more you, the better choices you can make. All the best.
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*For illustration purposes only. Actual rates of return may vary.
All investment strategies and investments involve risk of loss. Nothing contained in this website should be construed as investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.