Investing 101

Description

 For anyone who has never invested, the idea could seem a little unnerving at first. More often than not the reality is a far cry from the fast-paced trading floors we see on movies about Wall Street.

Savers will be familiar with the idea of putting money on deposit in the bank (or with another savings provider) and receiving interest at the end of the year. What they might not give much thought to, is that the interest rate paid is directly linked to what the bank earns, using their money, to lend to other people.

Investing is a way to set aside money while you are busy with life and have that money work for you so that you can fully reap the rewards of your labor in the future. Investing is a means to a happier ending. Legendary investor Warren Buffett defines investing as “…the process of laying out money now to receive more money in the future.” The goal of investing is to put your money to work in one or more types of investment vehicles in the hopes of growing your money over time.

  • Investing is defined as the act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.
  • Unlike consuming, investing earmarks money for the future, hoping that it will grow over time.
  • Investing, however, also comes with the risk for losses.
  • Investing in the stock market is the most common way for beginners to gain investment experience.

 

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