What is Investing?
Investing is when we use our money to grow our money. Watch this short, informational video below to learn more!
The most common way people invest is through the stock market. In the stock market, people use their money to buy very small parts of companies, called stocks, with the hope that the value of the shares will go up and make them more money. Some companies also share their profits with people who own stocks in the company.
Another way people invest is by buying bonds. Bonds can be offered by companies or by the government. Basically, a bond is a promise made by a company or government saying that they will pay back the holder/buyer of the bond. In other words, the company or government issuing the bond is borrowing money from the person buying the bond. The company or government issuing the bond pays the buyer of the bond interest, which is additional money given to the bond holder on top of the money returned to the buyer.
How to Invest?
Why should you invest?
Investing is a way to grow the amount of your money. Each year the dollar loses about 2% of its value, this is called inflation. So, to balance that 2% loss many people invest their money. On average, investor’s returns were about 10%. Based on this, if someone invested 1000 dollars into the stock market, they would make 100 dollars. If you don’t invest, your money would depreciate in value.