Investing Made Simple
Why investing and saving is an important role in your life
First off we should talk about savings.
Savings are a crucial part in life, its the money that you use to fall back on when you need to send your kids to college, save for a car, save for a house, or if a medical emergency comes up. There are quite a few ways to save money. You could take all your money and stuff it into your mattress... but Mr. Krabs from Spongebob would probably advise you not to do that because it isn't a very safe place to store all your money. (It even sent Mr. Krabs to the hospital!) That iss only way to save though.
Another way you can save (safely) is putting your money into the bank. You can open a savings account which will provide a very small amount of interest every year that the money is in the bank. This is a safe way to store your money and the liquidity of it is very high.
Another safe way to save money is through bonds. Bonds are set over the course of 10 (or more) years and accumulate a greater amount of interest than if you were to put it into just a normal savings account. The liquidity of these bonds are low though, because you can't exchange them for profit until it is time. If you return them earlier you will probably face a penalty... resulting in no profit and a fee from your wallet.
Now about investing
Investing can be tricky. Investing in the right stocks and products for income is the trickiest part of investing.
So why would you invest if its so risky? Well because you can make some very good profits off it if you invested in the right stocks.
2 simple tips i use to invest for you
1)Diversify your portfolio with more than just stock. Try to get stocks from different industries. This makes your investing a little more secure if one industry collapses for any reason.
2)Another tip for invest is ALWAYS do research... NEVER invest in stock that you don't know, or haven't done research on.
Investing is important if you feel like having extra money that you want to spend... And who doesn't want extra money?
The best part about investing? YOU DON'T HAVE TO WORK. LET YOUR MONEY WORK FOR YOU!
That is where i come in of course.. You hire me, I do research, and then "advise" you in what i believe would be a profitable stock. You then pay me only a portion of what you make.
The rest is yours to keep!
There are some setbacks to investing though. These include
Risk - The exposure to something dangerous or having potential for loss
Yes, you could lose some (or all) of your invested money if you do not invest smartly.
Return- The amount of profits you make from investing.
Investing is ALL about returns. When you get a return, it means you made profit. On average, the stock market produces an 11% return to smart investors.
Liquidity- How easily it is to get your money back into your hands.
The liquidity of banks is high, meaning you can get your money back pretty much when you want it.
The liquidity of bonds is low, because getting the money back into your hands (with profit) takes the duration of time the bond is good for. (10, 20, 30 years)
The liquidity of investing is medium, because if you own stock and you want your money back, you have to sell that stock. If nobody wants to buy the stock your selling, then you may be stuck with it for awhile. Sometimes it is easier to sell your stock. This is why investing has a medium liquidity.