1. Investing 101: Introduction
  2. Investing 101: What Is Investing?
  3. Investing 101: The Concept Of Compounding
  4. Investing 101: Knowing Yourself
  5. Investing 101: How Technology Has Changed Investing
  6. Investing 101: Types Of Investments
  7. Investing 101: Portfolios And Diversification
  8. Investing 101: Conclusion

Investing: The act of committing money or capital to an endeavor with the expectation of obtaining an additional income or profit.

Legendary investor Warren Buffett defines investing as “… the process of laying out money now to receive more money in the future.” The goal of investing is to put your money to work in one or more types of investment vehicles in the hopes of growing your money over time.

 

What is investing?

 

Investing is really about “working smarter and not harder.” Most of us work hard at our jobs, whether for a company or our own business. We often work long hours, which requires sacrifice and adds stress. Taking some of our hard-earned money and investing for our future needs is a way to make the most of what we earn.

 

Investing is also about making priorities for your money. Spending is easy and gives instant gratification—whether the splurge is on a new outfit, a vacation to some exotic spot or dinner in a fancy restaurant. All of these are wonderful and make life more enjoyable. But investing requires prioritizing our financial futures over our present desires.

 

Investing is a way to set aside money while you are busy with life and have that money work for you so that you can fully reap the rewards of your labor in the future. Investing is a means to a happier ending.

 

[ Investing is a complicated subject, but it can be very rewarding to those that put in the effort. If you're interested in accelerating your learning path, Investopedia's Investing for Beginners Course provides an in-depth introduction to the topic taught by a Chartered Financial Analyst. You'll learn investing basics, how to manage your portfolio, risk reduction techniques, and more in over 75 lessons containing on-demand video, exercises, and interactive content. ]

 

Investing Vehicles

 

There are many different ways you can go about investing, including putting money into stocks, bonds, mutual funds, ETFs, real estate (and other alternative investment vehicles), or even starting your own business.

 

Every investment vehicle has its positives and negatives, which we'll discuss in a later section of this tutorial. Understanding how different types of investment vehicles work is critical to your success. For example, what does a mutual fund invest in? Who is managing the fund? What are the fees and expenses? Are there any costs or penalties for accessing your  money? These are all questions that should be answered before making an investment. While it is true there are no guarantees of making money, some work on your part can increase your odds of being a successful investor. Analysis, research and even just reading up on investing can all help.

 

Now that you have a general idea of what investing is and why you should do it, it's time to learn about how investing lets you take advantage of one of the miracles of mathematics: compound interest.


Investing 101: The Concept Of Compounding
Related Articles
  1. Investing

    3 Factors to Help Define Your Investment Strategy

    Before choosing investments it's key to first understand why you are investing.
  2. Investing

    5 Reasons Why You Hate Money

    People often have a love/hate relationship with the Greenback. We provide five reasons for this ambivalence.
  3. Taxes

    8 Financial Tips For Young Adults

    You don't need an MBA to learn how to save money and invest in your future.
  4. Investing

    4 Behaviors That Sabotage Your Investment Goals

    If you can't figure out why you're not achieving the returns you want, these behaviors might explain why.
  5. Investing

    Investing With a Purpose

    Your reasons for investing are bound to change as you go through the ups and downs of life.
  6. Investing

    A Beginners' Guide To Managing Your Money

    This guide to managing your money will help you learn how to invest and understand risks before becoming your own financial manager.
  7. Investing

    How To Save To Start An Investment Portfolio

    How should aspiring investors best allocate funds for investing, and how much money should you have before you begin?
  8. Financial Advisor

    5 Questions First Time Investors Should Ask in 2016

    Learn five of the most important questions you need to ask if you are a new investor planning on starting an investment program in 2016.
  9. Investing

    Introduction To Value Investing

    Find out what value investing is and how you can put it to work for your investment portfolio.
  10. Personal Finance

    4 Steps to Ease Your Financial Worries

    These four strategies can help reduce financial stress.
Trading Center