Why Invest Your Money?
People, especially given today's economy, are very hesitant to invest
their money through various 'vehicles' or modes of investment due to
stock=market crashes, economic downfalls (think: 2008), but most
commonly a lack of understanding towards what investing really means -
how it's done responsibly.
It is possible, from all walks of life, to 'invest' your money into
various investment-vehicles ranging from homes, such as apartments
rented out, to stocks, bonds, all the way to vehicles (no punt
intended), such as automobiles.
Others might invest in a specific precious-stone or mineral, such as
Silver or Gold for example, and others will invest in a CD-account
through a bank, also known as a Certificate of Deposit - which
is a lump sum of money you cannot touch for an agreed upon
term - typically a year or more - and is guaranteed to accrue interest
A common misconception (and turn-off) to people when it comes to
investing money is haphazard like behavior, being misled, manipulated,
or otherwise 'scammed' out of their money - think of commercials that
selling U.S. mint coins in which they insist are 'guaranteed' to rocket
in value in the next few years, or are a 'one of a kind- investment.
If you or someone close to you are considering investing your money,
then by principal thorough research and analysis should be done prior,
over a credible period of time to weigh out the pros and cons or costs
to benefits analysis, understand the risks, and then make the most
profitable and practical decision based on your budget and profit
desirability--linked with current accessibility.
It's worth noting that just as there's the term and principle of
'compounding interest/ on a savings account or deposit; likewise do
entrepreneurs and other investors seek out forms of 'compounding
investments'. In other words, not putting 'all of your eggs into one
It's worth researching further; bonds (many are 'risk free' by
government affiliation), stocks, mutual funds, and even forex-options.
Ultimately, the primary factors should come down to the following:
Can you truly afford to invest money? By this, you should
self-evaluate the question: Can you afford to lose money?
What is your expected ROI (return of investment) or profit,
What is the purpose of this 'investment'?
Finally, it's worth understanding and building a distinction between
what an investment is and what a gamble is. Essentially, a gamble is a
financial decision based less off of logic but more on (favorless)
statistical probability, often, that you will lose your money. With gambling, the chances of doubling or tripling your money are miniscule
in comparison to the probability that you will lose your money and
therefore - by principal - should be avoided if you're serious about
investing your money.
People want a return on their investment, but even more so, people don't
want to lose money. Want a safer bet and investment? Consider the value,
for example, of a used 2011 Toyota Corolla with only 100,000 miles. The
likelihood that the resale value will remain sustained throughout the
course of the next 15--20K miles is high, so this in itself could be
considered a worthwhile investment for you or your loved ones to use the
vehicle, and then sell it either for the same value it was purchased at
(physical; non-monetary profit or purpose), or perhaps even a little bit
more (financial profit). Remember, 'Investing' is very much so based on
supply and demand, no matter where you seek out such opportunities.
Risk-factors will always exist in your life, no matter what it
involves--but especially when it comes to money and investing.