Your Definitive Guide to Everything Investing

Currently, getting the hang of investing is a real challenge for a lot of people.  You are hardly taught about it in schools, after all, and finding a proper mentor is not exactly an easy task.  For many of us, this means that our only option is to start going online and delving into the “self-help” style pages geared toward new investors.

Is that not why I am here?  Well, to some extent, it is.  However, I would like to take it a step further to provide you with pretty much everything that you need to know when it comes to this process.  That is right – welcome to your one-stop shop!

If this sounds like a valuable resource for you, then be sure to stick around!  Just know that it never hurts to check out some other perspectives as well.  Consider checking this one out before you continue, just to get some background information.  From there, let us get started!

What is Investing?

Every good guide should start out with a basic definition, so naturally, that is where we are going to begin today.  Thankfully, this is a pretty simple one to cover.  Investing is using your current funds and putting them in assets to make a profit with minimal interference on your end.

Easy, right?  Another way to think of it is to imagine putting your money “to work” for you – remember, you should not have to constantly monitor your assets.  If you do, you may want to consider redistributing your funds into something else.

Perhaps I am getting ahead of myself, though.  There are a few other terms that you will want to familiarize yourself with.  The first one is “capital.”  Luckily, this one is just another word for “money.”

What else, then?  You should definitely know what a portfolio is.  Think of them as being similar to something like an artist’s portfolio, but instead geared towards investing.  It is where you keep a record of your current assets and capital, and how they are being put to use.

Types of Assets

Now that you are equipped with that definition, let us get a bit more in-depth.  Perhaps the most important thing that you will need to learn about is the various types of financial assets that exist.  As you can probably imagine, there are a ton.  You can get a better understanding of what they are here: https://www.bea.gov/help/glossary/financial-assets.  I will focus on the specifics, though.

My only precaution here is that you will probably not run into every single one of these that I am going to cover.  In fact, some of them might seem like a waste of time for you.  That is normal, so feel free to skim through sections that are not appealing.

Cash

I am starting here since it is one that a lot of folks seem to overlook.  That makes sense, really – we do not tend to think of the cash in our wallets as an asset to be utilized.  This way of thinking is not necessarily wrong – you should probably not spend every dime that you get.

However, it is worth noting that it can be factored into your total net worth.  This applies to any bank accounts that you have as well (specifically the checking accounts that fall into this category).  While it might seem strange, we do count these.

Stocks and Bonds

Lumping these two together may seem strange at first, but it is mostly because of the fact that they are both fairly traditional and are intended to have the backing of the United States government (at least to some extent).  Bonds are directly sponsored by the federal bank, in fact, seeing as they are a loan to a said entity that you can cash in on later.

Stocks are most often acquired through the New York Stock Exchange.  When you purchase one, you are basically buying a portion of ownership of that company.  This can be a very small or a large percentage, depending on what is available and how much you want to spend.

Commodities

While the last one that I covered was more traditional, these ones are not.  Many different things fall under the umbrella term of “commodity.”  So, let me explain what that term even means.  It is really just an economics term for raw materials.  Just note that these materials then have to go through some sort of manufacturing process to qualify.

Because there are so many, we will not have time to cover each of them specifically.  Instead, I am opting to focus on one in particular.  Based on the picture above, you may have already guessed, but the answer is gold!  Really, all precious metals though.

Why am I centering our discussion here?  That is simple – it is one of the most popular forms of investing in commodities for everyday consumers.  The others simply do not have the same pull on this level.

Now, to get the full review on this aspect of investing, there are a ton of websites out there.  Really, you will want to look into a variety of potential vendors since there are so many.  Just know that bullion is a sound way to invest because of its longevity on the market and the unlikeliness to lose value.

Benefit Plans

The final type of asset that I want to highlight is another curveball but let me explain.  Employee benefit plans are actually considered to be assets, as weird as that may seem.  This is because it can be thought of as part of your overall comprehensive income.

Other Things to Know

Investing is a journey that takes a long time.  As you can see on this page, https://www.wallstreetmojo.com/financial-assets-types/, the vast variety of potential investments does not exactly make it any easier or faster.  In fact, there are some red flags that you should be on high alert for when it comes to selecting what you want to put in your portfolio.

As disappointing as it is, anything that promises to get you a ton of money in a very short period is probably to be avoided (like the plague, in fact).  These types of get-rich-quick schemes are nothing more than that: schemes.  More often than not they fail or are a complete scam used to take your money and leave you in the dust.

Remember – it is okay for building up wealth to take a long time.  That is why most experts recommend that you start preparing for your retirement as soon as possible, right?  We can apply that to pretty much all facets of this process.  Slow and steady truly does win the race, as cliché as that may sound.

Something else to consider, and my closing note for the day, is the fact that each investment that we take involves a certain level of risk versus reward.  It will of course be up to you to decide if you want to lean into one of those factors more than the other.  For some, the prospect of taking a risk is exciting and most of the appeal.

Unfortunately, gambling on our futures is not really recommended.  If you do feel that insatiable urge to do so, consider trying many smaller-scale assets for that sort of thing.  Never make a gamble with your retirement fund.  Surefire and low-risk investments are definitely the way to go there.

I have provided you with some examples of those already but doing some of your own research will certainly not hurt.  If nothing that I mentioned appealed to you, that may be what you need to do now.  Trust me, though, it will be time worth spending.  The more that you become informed on financial topics like this one, the more prepared you can be later on in life!

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