Investments

Investments might sound like something that rich people do to get richer

. "That investment really paid off" is not something many of us throw into a conversation, but there are many things that you can do to start investing today.

An example of an investment is the purchase of good, supplies, and equipment. Those purchases allow the business to make more profit - therefore they are an investment. An investment like this is money spent to gain better returns in the long term - in fact, that's probably a good definition for investments in general.

Another type of investment is one we are more familiar with. This is the type that you invest in a fund in order to make more money from it. An easy investment is a savings account. There are short term investments like real estate and long term ones such as annuities.

You can make a decent profit in a low risk investment that might take a while to make anything. Included are savings accounts, certificates, and money market accounts. They are very safe, but the amount of interest you earn is lower than the possible return on higher-risk investments.

High-risk investments are usually short term, but have higher profits. Some high risk investments would be real estate and stock markets. New companies can be very risky to invest in.

These are some of the more common investments used today:

Stocks: buying a piece of the company. The way to make a profit with stocks is to buy low and sell high or to receive stock dividends.

Bonds: When you lend money to a government agency. Bonds are much less risky than stocks.

Real Estate: Investing in real estate and reselling it with a profit. Fluctuations in the real estate market can make this riskier than it used to be.

Foreign Currency: With Forex, you trade currency pairs for other currency pairs in the hope that you will trade for currency that has more value.

Mutual Funds: Joining a group of others who are investing in a fund. You and the others share the cost of hiring professionals to manage your assets.

Certificates of Deposit: These are similar to savings accounts, except for the fact that they pay better interest. The reason for the higher interest rates are because you agree to leave the money there for a set amount of time. The longer you agree to keep the CD, the higher the interest rate.

A financial advisor will be able to help you decide where you would like to invest your money. If you want to set yourself up for retirement, a long-term, low risk investment may be better. If you have spare cash that you'd like to generate quick money with, you may want to try some of the higher-risk investments. Find a trustworthy advisor and read all documentation carefully.

by: Martha Monroe

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