Investing 101 – Making Money the Easy Way

investing 101 – Making Money the Easy Way

To be honest – there is no such thing as easy money, but there are ways that can make the process – a bit less difficult. The art of investing 101 goes a long way back and contrary to popular belief, you do not need expert knowledge in stocks and business to get you started. Of course, as any business venture, this one also carries some risks with it, but once you learn the basics and get the hang of it, you will realize that there are safer and faster ways to ensure your financial stability. These are the three basic types of investments:

Investing 101 Secrets of the Rich

Lending Investments

These types of investments are considered to be the safest way in investing 101 that will earn you money. Bonds are the most popular option when it comes to lending investments and they guarantee a stable and secure income. When purchasing a bond you are actually lending your bank the money and getting it back in a form of interest payments. The interest is paid on regular basis until the bond has matured. When this happens you get back the principal on the loan you made – easy as that. This is a great option if you are looking for a safe income with a smaller yield. Another lending investment comes in a form of your own savings account, were you can lend money to the bank and expect a pay back in loans. The income is not that high but it is regular.

Cash Equivalents

Another so-called safe form of investments is cash or cash equivalents which are known to be the most liquid current assets with a really small return. An investment is considered to be a cash equivalent if it has a maturity date up to 90 days or less. Money market funds are the most common model of cash equivalents and they represent a mutual fund which is characterized as a low-risk, low-return investment. These types of shares are always worth 1$, but they have no loads for entering or exiting the fund. The only bad side of money market funds is that they are not covered by the federal deposit insurance, but are generally considered to be one of the safest investment types there is.

Ownership Investments

The most common types of investments are definitely ownership investments, which are generally known to have the highest gain but also carry the highest risks as well. No pain no gain right? Purchasing stocks technically make you a co-owner of the company whose share you bought. Your profit is determined by how the market values your assets. You might get a part of your income from dividends, but not always. You can always take a higher risk and reinvest the profits in hope of bigger earnings; these are called growth in earnings. Investing 101 in a start-up business also counts as an ownership investment with a large potential. Another great way to earn some money is real estate investments where you purchase and resell real-estate objects in hope of making profit. Research is the key here but also finding a good and competent property agent that can help you get the most out of your investment.

The bottom line is quite simple when it comes to investing 101 – the more you invest the higher chance you have of earning some serious money. Of course, all investments come with a deal of risk, some higher and some lower. You do not necessarily have to become the next wolf from Wall Street, but surely you can provide yourself and your family some extra money or a stable income. Just remember to inform yourself as much as you can and to do your research thoroughly.

DianaSmith

Diana Smith is a business entrepreneur and grateful mom of two beautiful girls. She writes about topics related to business, marketing, travel, and technology.

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