An Introduction To Investing

“Money is like manure. You have to spread it around or it smells” – Jean Paul Getty

Background Stock photos by Vecteezy

Have you heard of the terms Bitcoin, Stocks and Shares, and diversification? If not, don’t worry! Investing is a complex and sometimes scary term, but we’re here to break it down. We’ll provide all the information you need to start understanding the various types of investments out there, and how you can use investments to make some money!

THE BASIC IDEA

Investing is making money, from money. The idea lies in buying something of value (e.g. a stock), hoping its price rises, and then selling it for a profit! Simple, right?

Investing has many negative connotations due to the bad reports that make their way onto the news, like stock market crashes and financial crises. Whereas, the good news often stays in the shadows. After some research, you’ll understand that investing does have its highs and lows, and being aware of the risks is a key factor to understanding investing.

RISK, AND HOW TO ELIMINATE RISK

Investing comes with an element of risk, as you cannot be sure whether the value of investments will rise or fall. It’s important to note that different investments have varying levels of risk. For example, Government Bonds provide a low-risk investment option, whereas Cryptocurrencies pose a much higher risk.

Risk can be eliminated through diversification, which involves spreading your money across multiple investments, as it is less likely that they will all fail. Imagine you’re the owner of an Ice Cream Van and an Umbrella stand. On a beautiful, sunny day, the Ice Cream van will have lots of business, but the Umbrella stand will be quiet. However, on a rainy day, it will be the opposite. Hence, you will have a steady income flow during both rain and shine! This is how diversification works.

Check out more information on investing here.

It’s important to note that this information is not financial advice and is for informational purposes only.