Investing 101

Investing is the practice of buying what would be considered an asset, or assets plural, to achieve a return on the initial monies spent. People go about investing in many different ways. Some of these include:

  • Real Estate
  • Stocks
  • Bonds
  • Mutual Funds
  • New or Existing Business
  • Personal Finance

• Investment Reasoning
Once an investment is made, it will hopefully provide you with a profit, which is the purpose behind the process to begin with. But so much depends on the markets, whether it’s stocks and bonds or real estate.

If you were to buy stocks that rise and eventually triple or even quadruple your initial investment, you might want to consider selling them before they possibly fall, thereby achieving your goal of making a profit. You would decide then to either keep those monies or reinvest in another stock. It’s the same basic concept when investing in funds. The more valuable they become, the bigger profit you achieve. When bond interests mature, it can be very profitable for the investor and if successful, will provide revenue that is far above what the initial investment cost was.

Some people buy real estate. This can be a very lucrative depending on what one does with it. Purchasing dilapidated homes, putting money into fixing them up and then placing them back on the market at a much higher price can turn out to be a great investment and something you might start doing over and over again. But remember that most often, this type of investment entails a lot of time and a lot of money upfront.

investmentReal estate can also be purchased as a means of profit if you were to become a landlord and rent out or lease the space within your building. Depending on the location of your property, you can make quite a pretty penny through this type of investment.

• Professional Guidance
If you’re interested in investing but don’t have any idea about how to get started, one thing you can do is contact a Financial Advisor. These individuals are highly-qualified in most every monetary area of business and personal financial planning and can guide you toward the most appropriate means for investing your money. And not only will a financial advisor offer you direction and advice about when, where and how to invest your money, but once you’ve determined your investments, they’ll handle all of the details for you.

Kind of similar to the manner in which a stock broker works, a financial advisor will keep abreast of your investments and the markets involved and make suggestions on buying and selling as they deem appropriate. They will keep you updated as to the status of your investments as well. You should feel comfortable with whichever advisor you hire and may actually want to do some research on several of them before making a final selection. After all, it’s your hard-earned money and you should feel completely secure putting it in the hands of someone else.

• The Risk Factor
Remember that with whichever area you ultimately decide to invest in – stocks, bond, real estate, business, what have you, there is always a risk factor. And losing money is of course, never an enjoyable incidence. However, being realistic and going into the process with the acknowledgement that here is no guarantee of a return, and also being aware that you may even actually incur a loss or two, will help you greatly when making your investment decisions and dealing with the ups and downs of this sometimes complicated and risky course of financial action. One last thing to always keep in mind is that it is highly-suggested, for logical reasons, that you never invest more than you can afford to lose.

• Individual Prerogative
The probability of experiencing a monetary loss depends greatly on the market you choose to invest in so be as informed as possible before making any concrete financial decisions. They say ‘knowledge is power’ and in this instance, it couldn’t be more true because investing can be a tricky situation as well as stressful and overwhelming depending on what you’ve put your money into, and especially if you’re not well-informed in that specific domain. So it it’s always best, when possible, to use what you already have should you decide to go it alone and invest based on your own personal preference.