Investing is the process of putting money into “assets”, such as stocks and shares, bonds, property, commodities or any other asset, that will, over time, increase in value and, or, produce an income.
It is putting your money to work as hard as possible, for as long as possible, so that you don’t have to in later life.
The sacrifice of investing can be considered on the basis of the “some jam today, or more jam tomorrow” scenario.
By investing money you have today, instead of spending it, you are building wealth and freedom for your future.
Investing differs from saving in a number of ways. When you save, you are putting money into a savings product, with a bank or building society, that won’t lose your capital. Investing on the other hand, is about trying to make your money grow significantly over time, using both capital appreciation, and the wonders of compound interest. But there is more risk.
The main asset classes for investing are stocks and shares, or equities, bonds, property and commodities. We will review all of these in this section, as well as some other potential assets that some investors use.
When you invest for your long term wealth or financial freedom, you need to have a plan.
This plan will consist of objectives and goals, and together they will form your overall financial strategy for achieving your goals.