Investing money is a way for individuals to save toward their goals, whether it be retirement, a child’s college education, or some other financial goal. New investors need to take the time to determine their goals and learn some basic concepts of investing before jumping right into making an investment. Successful investing takes much research, time, and patience. As a beginner starts by being successful in making money through investments.
How much money do I need to make an investment? One common misconception by beginners is that they must have a large sum of money to make an investment. The truth is, many investments can be made for as little as hundred or perhaps a few thousand dollars. One way to begin investing small is through dividend reinvestment plans or direct stock purchase options. Investors may be able to invest in a company’s stock options by paying a minimal start-up fee, often as little as $25 or $50 and making an initial investment. Once the money begins adding up, it can then be transferred to a brokerage account, where the investor will be able to begin investing larger sums of money.
What are the different types of investing? Once investors determine that they have enough money to make an investment, the difficult part is often deciding where to invest their money. There are many different options for investors; some of the most common investment options are mutual funds, bonds, futures, and real estate.
Mutual funds – A way for individuals to invest without having to manage their investment “hands-on” is through investing in mutual funds. Mutual funds are investments that are handled by a fund manager. This fund manager invests the pool of money, contributed to by several individual investors, in the financial marketplace. The funds may be invested through closed or open-ended funds.
Bonds – When investors purchase bonds, they are buying an interest in a company or corporation. The company’s issues bonds, which is a loan from an investor. In turn, the company agrees to pay this investor back at determined intervals with interest. Investing in bonds can be a secure investment. Unless the company goes bankrupt, the investor is almost certain to receive back at least the minimum amount of his investment. These interest payments at set intervals can be a source of steady income for retired couples or others wishing to create a type of investment where they can generate consistent returns.
Real Estate – Real estate can a good investment when the timing is right but often requires a lot of work. Another way of making money is through purchasing properties, improving the properties through repairing them or adding amenities, then selling them at a profit; or renting the houses to tenants and receiving a monthly income from the payments.