Investing is defined as the act of pledging capital or money into an area with the expectation of earning a return or additional income. There is a risk for investors of losing money too, however, putting your money into the stock market is a common way for those who are unsure of where to begin to gain some experience within the investment activity.
When you are busy with your life or can’t start new businesses or buy and sell products and services aside from your day job, the stock market is a clever way to make your extra money work for you for your future. One of the most famous investors in the world, Warren Buffet, states that investing is… “the process of laying out money now to receive more money in the future.”
If you have an extra $1000 set aside to invest in, or perhaps $20 per week to put towards any venture, it may be a good idea to start investing today. Some of the world’s top leaders and businessmen – take Tej Kohli for example – have made successful investment decisions, helping them to build their own business and using that money for good causes like founding the Corneal Institution of Blindness.
You too can invest your funds into stocks and see them grow, and use the returns to build your very own successful investment portfolio. However, before you rush to buy a Bethesda game stock, you have to make careful considerations first. One of the best places to start is to find out which of the 3 common types of investors is most suited for you and your needs.
Find Out Which Option Suits Your Needs the Best
There are many types of investors, and finding out which one you are, is a good way to manage your money’s growth potential. For instance, some keep an eye on their money regularly, while others put their money into a stock and forget about it for a few years. Either one of these allows you to invest in items like stocks, exchange-traded funds (ETFs), bonds, mutual or index funds.
You may find that hiring a broker is the easiest option for you. These individuals will help you in everything related to your money and know the right stocks to invest in. However, when going with brokers, you need to have an ample amount of money as they wil ltypically charge a fee to provide you with the right advice. There are 3 types of investors: pre-investors, passive investors and active investors.
Difference Between The 3 types of stock market investors
Pre-Investors: those who have minimal financial awareness, and you may not get much of a return out. You would usually go with a company’s retirement plan instead of the stock markets.
Passive Investor: This is the most common starting point for many. Here you would have a sound idea of your finances and put your money into several different stocks. Many choose to hire experts to manage their money.
Active Investor: those who utilize their wealth like a business. You are active in all your investments and understand that it’s about a return on capital.
As a basic guide, finding out which one resonates with you is a good starting point to the road ahead.
Now you have a little more knowledge about investing and building your wealth for the future, is now the time to take the plunge and begin your investment portfolio?