If you want to make money, work for that money. If you want to make BIG money, make money work for you. By investing today, the money that is currently in your pocket can turn around a bring you major profit tomorrow.
There are many ways to invest your money, nearly all of which have possibilities for huge returns. By understanding the different ways you can invest your money, you will have the knowledge you need to make an informed decision and increase the likelihood of you making much more off of your investment.
“Buy a stock the way you would buy a house. Understand and like it such that you’d be content to own it in the absence of any market.” - Warren Buffett
Types of Investments
There are many types of investments you can make, not every one of which will prove to be be fiscally rewarding. Here are some of the more common (and economical) investments you can make that are great places to start
Savings Account : this is a bank account that pays interest, but restricts the amount of money that can be withdrawn from it
Stocks : stocks are portions of businesses / companies. If the business does well, your stock will increase in value, providing a profit for the investor. If the business fails, however, the value of your stock will plummet and you will unfortunately have to take the loss
Real Estate : investing in real estate can pay off in a number of ways. Whether it's flipping the house for an instant return, or renting the property for continual income, real estate is usually a safe investment
Savings Accounts are safe investments, perfect for first-time investors. It pays you interest on the money you deposit into it, usually at a low rate over time.
Investing in real estate is a great way to make a lot of money over time. Buying property and then renting the space out gives you financial returns on the investment almost instantly. Plus, once the mortgage on the property is paid off, most of the rental income becomes straight profit.
Another way to invest in real estate is to buy and flip (aka Real Estate Trading). This method takes a little more experience and knowledge in the real estate marketplace. Luck is also a huge contributor in the success of buying and flipping, because if the market takes an unexpected turn for the worse you may be stuck with a headache as you try to sell your investment at a lower price range than what you had initially planned.
Stocks represent portions of ownership in a company or business. There is a separation between ownership and control here, where, although you control a portion of the business, you don't actually physically own any of its assets or liquidated cash. That means if you go bankrupt, you won't be able to tap into the company's assets to pay your debts. But it also means that if the company goes bankrupt, your personal assets are still safe. Generally speaking, buying stocks enables you to have a semblance of control over the direction the company operates, and also makes it possible for you to sell the stock that you have in a company for a profit.
Ideally the process would go like this:
1.) You invest in a company in which you see potential for growth and receive stock in return for your invested capitol
2.) The company does very well, and its net worth grows to a point where your stock in the company is worth many times more than the amount you invested.
3.) At a point where you are satisfied with the amount your stock's worth has grown, you sell your stock for a major profit.
Another way of doing it would be by purchasing 'bonds' in a company. Bonds are basically IOUs, where you 'lend' the company an amount of money with the promise that the amount will be paid back with interest. Bondholders have no ownership in the company, and their investment doesn't grow at the radical rate in which a stock might, but bondholders ARE given priority over shareholders in the case of a bankruptcy. Bondholders are paid off before shareholders are, and thus bonds provide less of a risk than stocks.
No matter what, you want to make your money work for you. Investing it wisely is the best way to do just that!