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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 - or 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 essentially 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 at a specific rate.

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 are 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 basket'.

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, realistically?
  • 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.
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