Investing Basics

What motivates a person to invest, rather thanInvesting even a small amount can produce
spending his money immediately?considerable rewards over the long term, especially if
The most common answer is savings -- the desire toyou do it regularly.
pass money from the present into the future.Investing means you have to make decisions about
People anticipate future cash needs, and expect thathow much you want to invest and where to invest
their earnings in the future will not meet those needs.it.
Another motivation is the desire to increase wealth,To choose wisely, you need to know what choices
i.e. make money grow.you have and what risks you take when you invest
Sometimes, the desire to become wealthy in thein different ways.
future can make you willing to take big risks.If you want to invest, you have a wealth of
The purchase of a lottery ticket, for instance onlyopportunities. Selecting the best investment depends
increases the probability of becoming very wealthy,on your financial goals and general market conditions.
but sometimes a small chance at a big payoff, evenThe right investment is a balance of three things:
if it costs a dollar or two, is better than none at all!1. Liquidity (How accessible is your money?)
When you invest, you are increasing your income and2. Safety (What's the risk involved?) and
building the value of your assets!3. Return (What can you get back on your
It's never too soon to start thinking about investing.investment!)
Investing means putting your money to work earningYou can find many things to invest in, but the basic
more money. Done wisely, it can help you meet yourthree: stocks, bonds and cash should be the core of
financial goals.any investment portfolio.
You don't have to be wealthy to be an investor.