Introduction to Investing (Part 1)

What is Investing?

Many of you who are reading this have probably heard of this word. However, you may not know exactly what it is. The general definition of investing is to spend money in the hopes that this will return more money to you later.

What are Examples of Investing?

There are many actions that would be considered investing, and I will cover them in more detail in later articles, but some common examples are opening a savings account at a bank, which will give you money back in the form of interest, or buying stock, which you can sell at a later date.

Even starting a business would be considered investing, since a business requires a lot of money to open, but will hopefully make profit later. There are so many different ways to invest, with options for everyone, regardless of experience.

Why Should We Invest?

Many are scared to enter the investing world because of the risk involved. And while it is true that there is a level of risk, with the proper knowledge and care, we can keep the risk at a minimum.

Investing is a key part of managing one’s money. Cash just sitting in your house is useless, as it isn’t doing anything. In fact, because of a concept called inflation, this money is steadily losing value, and so you’re essentially losing money. Investing is a powerful way to counter this.

When you invest, you’re putting your money to work for you. Whether it’s in a bank account or in the stock market, it’s generating more money. This can balance out the effects of inflation, and even make more money for you. And the best part is, you don’t even have to do anything! All you need to do is invest the money in any one of the many ways that you can, and sit back and watch it grow on its own.

Now this sounds fantastic, but unfortunately I have to pop your bubble a bit. As I mentioned before, there is a level of risk to any sort of investing, and you have to be very careful when doing it. However, in later articles, I will teach you ways to minimize this risk and ensure that you’re getting the largest returns that you can.