26 April 2021



Investing usually makes us think of crowded floors on Wall Street full of screaming, hectic men in suits negotiating million-dollar deals. The reality is that everyday investing is actually a reliable way for anyone and everyone to grow their savings. Here’s what you want and need to know when it comes to investing your money.



The official definition of investing is “to put (money) to use, by purchase or expenditure, in something offering potential profitable returns, as interest, income, or appreciation in value.” – Dictionary.com. The simple definition of an investment is allotting some of your money toward something (we will define the something in a moment) that will earn a financial return. Smart investments are long-term, usually with a specific financial goal or purchase in mind.



There are eight main types of investments, a.k.a eight types of somethings. Each type of investment comes with its own set of advantages and risks. It’s essential to fully grasp the concept, the reality and the risks before making the investment leap. Even after considering this article, it’s wise to discuss your options with your financial institution or an independent financial advisor.

  • Bonds. A bond is a little bit like a loan that earns interest. You loan your money out to the government or an independent, and in turn, they pay it back at a specific time with interest earned. The interest earned will be much higher than you would typically earn by saving that money in the bank. While bonds are a pretty sure thing, they still have a risk factor. “…it is important to understand the precise terms before investing. In particular, there are six important features to look for when considering a bond.” – Investopedia.com They go on to explain the following three risks,
    • Interest Rate | The interest rates can fluctuate, resulting in a hard to predict return.
    • Credit/Default Rate | If the company defaults, you lose your investment and any chance of seeing growth.
    • Prepayment Risk | If, for some reason, the company needs to pay back its investors before the initial period, you can end up making far less interest than initially expected.
  • GICs. GICs are similar to bonds but with less risk. A GIC is a Guaranteed Investment Contract. Like a bond, you loan your money to the government in return for interest. Think of it as a high-interest savings account.
  • Stocks. Stocks are a simple concept but with a lot of minor details and rules. Companies break their shares up into smaller shares and sell them out. They get your money to help support their company, and you either make money based on a set dividend (Dividends are regular payments of profit made to investors who own a company’s stock.) or according to how the company does. It’s imperative to have a financial advisor when it comes to this type of investment or to play softball using an automated investing program.
  • Real Estate. Real estate is a very popular means of investment. While a real estate investment is costly, the regular return is low-risk and nicely padded. It turns out it’s also an excellent way for small-time investors to begin. “With only $1,000, your best bet is to start with publicly-traded REITs, which require an investment of only a few hundred dollars. Be sure to purchase an Equity REIT as opposed to the more complicated mortgage REIT.” – com. MoneyUnder30 goes on to describe the various ways small investors can team up with professional realtors via crowdfunding and the like.



It’s essential, as is any expense, that you take the time to consider your personal finances, family situation, as well as the reality of the risk and returns of investing before making the leap. Make sure you have the following in check before you reach out for investment opportunities.

  • Audit your finances. Make an appointment with your financial institution and break down everything you owe, your income, and your assets.
  • Educate yourself. It’s essential to learn the art of mastering your personal finances before you begin investing. You can make good use of the many amazing financial blogs and podcasts available at no cost. Get the lay of the land and a feel for what type of investing might be right for you.
  • Remedy your debt. No matter what way you look at it, debt is not something to be ignored or left till later. Before you save, spend or invest, you will want to make sure that your debt is under control and on the way to being eliminated.
  • Establish an emergency fund. An emergency fund isn’t actually a luxury but a way to prevent yourself from going into further debt. When the inevitable job loss, home or car repair, etc., comes up, you will be able to rely on your emergency savings rather than putting it on a credit card. You don’t want to be maxing out your credit cards while your liquid cash is held up in investments.
  • Consult your family. Once you’ve consulted a financial expert, remedied your debt, and built or at least started your emergency fund, it is wise to consult your family before moving ahead. Let your spouse or partner know what you are thinking of doing. Ask them if they have any input. While investing isn’t a codependent decision, it’s healthy to be upfront about investing as there are always risks involved.


However you choose to enter the world of investing, just be sure to take your time, weigh the costs and risks, and start small. Look at investing as a reliable way to build your savings instead of a get-rich quick plan.


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