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InvestingA D E F I N I T I O N
A B E G I N N E R ' S G U I D E T O
Investing is likelearning a language.
Anyone who has mastered a newlanguage knows what it’s like toreassign thoughts and ideas to
match new words and sounds, tobend your brain around brand newmeaning and reconfigure existing
knowledge to move in patternswhich may redefine or even defy
previous experience.
Learning AboutInvesting
Becoming a knowledgeable investor is a similar process, as it involvesmastering the dialect of finance. The input of financial knowledge causessymbols which you thought you understood take on alternative context; toincorporate this new investing information requires rewiring what you know
about monetary value (namely how it’s spent), how it’s produced, and how youcan increase yours.
Read up!Investing may seem rather complex, but that complexity is largely an illusion.
Financial advisors earn a fabulous living by capitalizing on the averageindividual’s economic ignorance. Adding a few basic and quickly masteredinvesting concepts to your knowledge base can be endlessly beneficial foranyone looking to boost their financial status. Information is strength, and
financial information is financial strength. I believe in being as empowered aspossible, so I’m building this beginner’s guide to investing for anyone cravingcontrol of their own economic state. If you want to avoid getting fleeced by
financial advisors and improve your overall quality of life, this guide is for you.
So, what isinvesting?
Some people equate investing withhigh stakes gambling. To the cynicaland uniformed, investing money mightresemble finding which way the windblows by standing on a cliff during athunderstorm, and waving aroundhandfuls of cash. Both of theseviewpoints are a caricature of whatinvesting actually is.
Simply put, to invest means to makemoney with money. Our worldoperates on money, and any financialendeavor requires funds to function. Weacquire these funds by presenting theoption to “invest,” or give money to theirventure in exchange for a type ofoffering or mutual agreement. Theseofferings include stock (bite-sizeportions of company ownership), bonds(a kind of interest-earning IOU), realestate, or mutual funds, among otherthings.
Simply put...
Is itgambling?
The value of a stock, bond, or similaroffering is contingent upon theeconomic strength of the venturewhich issued it. Since the future of alleconomic ventures are uncertain,placing your financial faith in any ofthem might seem like a shaky prospect,hence the financial market’s stigmaticreputation as no more than a glorifiedroulette wheel.
Investing isanything butrandom.
This might be true, were it not for the fact thatroulette is random, and a good investment isanything but. Making a wise investment involvesanalyzing market trends, determining how certainfinancial interests are performing, predicting howthey will perform in the future, and investing in amanner which accounts for the best and worstpossible performance scenarios.
Follow me!Defining investing is only the beginning to a safe and profitablefinancial future. Check back soon for “A Beginner’s Guide toInvesting: Compounding.” Do you want more financial tips,tricks, and news in the meantime? Follow me on Twitter@EricaHill_KW!
