The concept of having your money make more money. No, your money is not using AI to clone itself 🤑. It is the magic of investing in the stock market.
Investing gives you the opportunity to make money without trading too much of your time or effort. Just like investing in real estate or your cousin’s millionaire making business idea, it comes with risks. But do it smartly and receive satisfying returns. Returns come in the form of increases in stock value, income from dividends, and most importantly compounding.
The three biggest types of investment options are stocks, bond, and funds (mutual funds, ETFs). A stock is ownership in a company. You can buy Apple stock to own a little bit of Apple. Bonds are loans to a government or company. Buying a bond means lending money to the issuer and you make a return in the interest they pay for the loan. And finally, a fund is a mix of different stocks, bonds, or both.
Most likely you already are investing in the stock market through your employer’s retirement plan. Also likely is you do not know what you are investing in. You opted in to the retirement plan and did not give it another thought. That is okay! If you want to be a more active investor stay tuned to future issues. Investing is one of my favorite personal finance topics.
MMM tip: Do you have an investment account? If not open one today! You do not have to put any money in it yet, just get an account. My favorite site is Vanguard and there are many other options available.
Until next week!
Dariene
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Disclaimer: This newsletter is for informational and educational purposes only and should not be considered financial, investment, tax, or legal advice. I am not a licensed financial advisor. Please consult a qualified professional before making any financial decisions.
