Invest!
It's time to start thinking long-term.
The basics.
You have the ability to invest in pretty much whatever you want. Odds are, in the long run you will grow your money quite a bit.
So what should you invest in?
- Bonds
- Stocks
Bonds
A bond is simply when you lend money to the government or a coroporation, and they agree to repay you with interest later. You can buy bonds of many different denominations, with different interest rates and levels of safety.
Types
- Savings Bonds
- Treasury Bonds, Bills, and Notes
- Municipal Bonds
- Corporate Bonds
- Junk Bonds
If you are looking for a bond with a high interest rate, you might consider Junk Bonds, however if you are looking into a more safe investment, Municipal Bonds, Treasury Bonds, or Savings Bonds may be the way to go.
Stocks
You buy shares of stock in a corporation, and they use that money to grow their business. In turn, you may either receive dividends, or part of the company's profits, or capital gains, which is when you sell the stock for more than you bought it for.
What kinds of stock are there?
- Income Stock
- Growth Stock
- Common Stock
- Preffered Stock
Income stocks pay dividends, while Growth stock rarely does. People who buy Common stock are voting owners of the corporation, and those who buy preferred stock are not.
Where is stock bought and sold?
- Stock exchanges
How do you buy stock?
- Call a stockbroker
- Research different brokerage firms to find a stockbroker
How do they compare?
Stocks are riskier than bonds, but returns are usually higher.
Why now?
If you wait to invest in stock, you will not make as much money. Your money begins to grow immediately, so waiting until you have more money to invest is actually hurting you.