One of the keys to being successful with money is to invest it. It is a known fact that the people who are truly wealthy invest their money and have it grow over time. Investments let people grow their money slowly over time. This brings us to another interesting question, how can someone invest their money? Here are 4 things you can invest into.
1. Stocks
Stocks are simply shares of a company. When you buy a stock you are buying a portion of the company and as such your share should increase as the company grows over time. Investors can make money by getting into stocks that they believe will grow.
Some companies have dividend stocks which periodically pay their investors a percentage of their earnings. Investors who hold enough shares of a company may actually be able to make a living simply by hanging onto those stocks and spending the dividends that they recieve.
2. Bonds
Bonds are similar to stocks only with one exception. When you buy a bond you do not buy a percentage of the company, but instead you buy part of the companies debt. For instance, say you buy a bond, you have given the company money to do with as they please. In exchange you recieve interest payments and are payed back at some point in the future, in a sense you have become the bank.
3. Commodities
So, what are commodity futures? Well when an investor buys a commodity future they buy a given commodity such as Gold or water at a certain time in the future. If they do not wish to actually own the commodity they can sell it before expiration and wither make or lose money based on how the value of that commodity and the futures contract where changed.
4 ETFs
Now that you know what stocks, bonds, and commodities are, what are these Exchange Traded Funds? These are investments that consists of a lot of other investments. Each ETF tracks a different part of the market. For example an airline ETF may consist of the top 20 airline companies. Investing into an airline ETF would be a great way to invest into the airline industry without having to single out a single stock.
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