Investing And Everything You Need To Know
Investing is among the most innovative things people can do with their money, so it is a shame that many people do not think about it until it is too late.
That is not to say a person of any age cannot get involved with investing, as this is not the case. Many people today focus on short-term rewards instead of long-term gains.
Those in the know will know that the earlier one starts, the better chance they must grow their money exponentially.
At its core, that is all that investing is—making your money work smarter while doing little to no work during this time.
Introduction To Investing
There is little doubt that investing is something that everyone should do, yet it is rarely taught in schools to give children the best start possible in the activity.
Instead, it is something that people must independently research, as those who do not take charge of learning how to invest will likely never know how to do it.
Fortunately, many online resources go into great detail about all types of investing and how one may navigate their way into it.
Indeed, when it comes to different investments, there are countless types to choose from, so many that those new to investing may feel a little overwhelmed.
Given that there is a wealth of options available to new investors, it is essential to consolidate all these possibilities so those who need this information can easily access it.
The hope is that people will eventually have the knowledge and confidence to begin their investing journey, as it will likely be the best chance people can have in their lives.
Before getting started, people should never forget that investing is for the long term, and they should squash any expectations of becoming wealthy quickly.
Warren Buffet famously said, “nobody wants to get rich slowly,” but this is something that people will have to accept if they want a near-certain return on their investments.
Why Invest?
For some, investing is not the obvious choice that many believe it is.
A common understanding in investing is that people’s money is always at risk, which is valid to an extent.
For example, buying many shares in reputable stock can seem intelligent, but that money is lost if the company goes bust.
In comparison, something like a savings account seems much safer as it is unlikely the same scenario will happen to a bank – and even if it does, there are multiple protections in place.
However, if a specific stock, such as Google, goes bust, the whole market is in trouble, and losing that money will be the least of a person’s worries.
Certain investments can be as safe as using a savings account while simultaneously providing a higher return.
If people want to get rich eventually, they must look to other methods of growing their money other than leaving it in a bank or savings account.
The interest on these is famously low, and any growth will not really have any impact unless there are high amounts of money in the account, at which point most people will not even have their money in such an account to begin.
When it comes to why people should invest, the reasons are just about limitless.
Here are some of the best reasons why people should get into investing:
- Grow your money
- Save for retirement
- Reach financial freedom
- Start a business
- Help out friends and family
Saving vs. Investing
Contrary to popular belief, there is a difference between investing and saving.
While they both involve putting money away to grow, one is more active in this process, while the other is more sedentary.
Ironically, the importance of saving is generally taught in schools and by parents who give their children pocket money to either spend straight away or save to buy something more extensive.
When it comes to saving, there is a clear goal that people wish to reach, and they do this by gradually setting money aside over time.
Due to low-interest rates, or sometimes even no interest rate, the funds will hardly grow, which means saving is best suited for those with short-term goals.
On the other hand, investing takes a wildly different approach to saving as the money is put aside without a clear goal.
Generally, most people will invest their money to allow it to grow as much as possible, though some short-term investing strategies can also prove profitable.
Those interested in investing should understand that this money should not be touched for a minimum of five years, as this is when people will start to see substantial returns on their investments.
Saving and investing are suited to two different types of people.
Those who want to go on holiday next year would do well to save their money to afford it.
However, people who want to buy a house within the next ten years, for example, would fare far better by investing their money.
What Are The Best Investment Ideas?
Those stuck around this long will likely be the same people proactively trying to grow their money, as they will be wondering what some of the best investment ideas are.
The truth is that investment opportunities can be found anywhere across a range of industries; all it takes is the right eye to seize the opportunity.
With this general advice in mind, here are some of the best investment ideas people can get involved with to understand better.
Property Investing
When it comes to investing, buying a property seems to be the golden rule for most, and it has long been a way for people to grow their money, whether due to rising house prices or receiving a passive income when renting.
The reality is that buying a property is one of the safest, most brilliant investments people can make, given the strength and reliability of the market.
However, people should be aware of the specific challenges that come with this investment.
Undoubtedly, people will always need houses to live in, a universal truth that will go a long way in convincing people to climb the property ladder.
In many countries, the demand for housing is outstripping the supply of houses available, which is valid for places like the UK.
With that intent, this is one reason why house prices have risen, to the joy of homeowners.
Many might consider that it is the wrong time to buy a property due to high prices, but the reality is that it is likely that houses will only rise in the future, making whatever time people can buy a property the best time to get stuck in.
Investing In Collectables
Rare products will naturally cost more than standard products.
This is why certain coins that have had errors in the manufacturing process can sell for so much – as humans, we are drawn to uniqueness.
Those who invest in collectibles do so because it is doubly beneficial to them.
One-of-a-kind items will only increase in value the longer it is held onto, but some may buy collectibles just because they are interested in them.
Investing in collectibles involves more work than other investments, as people must ensure the item is kept in mint condition.
This is not too troublesome if this is something like a trading card that can be kept packaged.
Even so, if it is something like a classic car, it will need to be cared for and driven often.
Stock Market Investing
Most people will have heard of the stock market. And some of the horror stories that some have experienced, likely turning many away.
However, investing in companies remains one of the most popular investments as the returns that some give over a year are far higher than anyone could get from a savings account.
The stock market is also suited to all types of investors, making it one of the most accessible investments.
Those who want safe, smaller returns can invest in trusted companies like tech giants.
Nonetheless, those who are riskier can back smaller companies that have a higher growth potential in the hopes of becoming rich with the company in the future.
Investing In Your Future
Investing is something that everyone should be involved with, as it is the best way to attain financial freedom – a notion that everyone likely desires to reach,
Discussion: Would you invest in a home with high prices right now? If not, where would you put investment money to work for you?
Leave me a comment below.
Mr.CBB
We invest in a combination of dividend paying stocks and index funds. We have a mix of foreign and domestic equities and bonds. The income generated from our non registered investment account is used to supplement the pension income the following year. All of our investment accounts are self directed. We saved a lot of money be reducing the fees associated with investing and we stay away from mutual funds because of the fees.