What is Investment?
This post is about what an investment is and how to invest. Investing is a tool to reach your financial goals on your financial journey.
Investment is when you put money away to get a return later in the future. It’s a key component of wealth creation. Your smart investment will grow with compound interest, which means interest grows interest.
Where Can I Invest?
Popular ways to invest are in stocks, bonds, and real estate. Investing in stocks means you are trusting and believing in a company. If you invest in the stock market and invest in a company like Apple or an index fund that follows S&P 500, your return can be on average 7% a year (in the long run). By investing in these companies, you will get paid in dividends quarterly which you can reinvest or keep the cash.
Another way to invest is by buying property and renting it out. Rental income can bring wealth if managed correctly.
How Much Money Do I Need To Start Investing?
A common misconception is that you need a lot of money to invest, but this is not true. You can invest with whatever amount you have, so don’t wait for tomorrow and start investing today!
One excellent option for beginners is to invest in index funds. Check out our post about index funds. You might also consider checking out more information of funds in general – Mutual Funds vs. ETF Pros and Cons.