Investing is the process of deferring your current spending, much like saving, and placing your money into an asset in order for it to grow. Simply, investing means buying things like stocks, bonds, or real estate so that you can continue to work at your current job and make the money that you have saved work for you. It’s a way to participate in the profits of a company or entity without working directly for them.
Investing is not a get rich quick scheme. I know everyone has heard stories of people making it big by investing. I know you have also heard of people losing their shirts just as quickly. These people are really lucky, really unlucky, dumb, or smart. Yep! It’s the whole spectrum. You really can’t tell how people made their fortune or lost it all. The only thing that is guaranteed is that they took a risk by investing their money and it either paid off or it didn’t.
What Is Investing?
Investing is not gambling. Sure; if you invest in things you don’t understand, it can be considered gambling. But gambling is when you make a bet at fixed odds with an outcome that is not guaranteed. Investing is not guaranteed either, but it is definitely not a gamble if you are committed with a long term vision.
Investing requires some research and analysis. You should never invest in things that you don’t understand. That doesn’t mean that you have to get every aspect of an investment. You should at least, however, get the basic idea and make sure that it is suitable for you.
Investing requires a long term commitment. You can’t chicken out at the first sign of a dip. You have to be sure that your portfolio satisfies your risk requirements and is built to fit your needs. Don’t watch too much TV about the markets and don’t inspect your accounts daily. You’ll just scare yourself and second guess your investment plan.
Investing is for the future. You can invest for a variety of reasons. Most people invest for their retirement. Even if you can only afford to budget a very small portion of your income for investing, you should make retirement your number one priority. Unless you are a professional, or highly trained, do not attempt to invest on a short term basis. High frequency traders, or day traders, are rarely successful.
Since my focus is on making investing easy, the only rule I want you to remember is: Buy low, sell high.
Investing For Beginners
If you’re new to investing, or just need a refresher, this is a great place to start.
This guide was developed to teach you about investing based on these principles:
- Investing should be easy and accessible to everyone.
- Learning at your own pace is important. Read this guide at your leisure and don’t hesitate to look back to the basics and ask questions.
- Articles are written in an organized manner. They are meant to walk you through the process of investing in a step-by-step fashion.
- We will build upon and develop your knowledge over time. You need to know the fundamentals and have a good foundation before risking your hard earned money.
- Our goal is to give you the ability to invest confidently so you can take steps to ensure your financial security.
- An Introduction To Investing
- An Overview Of The Different Types Of Investments
- The Types Of Employer Sponsored Retirement Accounts
- The Types Of Individual Retirement Accounts
- Retirement Accounts For The Self-Employed
- Education Investment Accounts & College Savings Plans
- Regular Taxable Investment Accounts
- Other Investment Accounts