What is investing?

What is investing?

It's actually pretty simple: investing means putting your money to work for you–actually, it's a different way to think about how to make money. Growing up, most of us were taught that you can earn an income only by getting a job and working. And so that's what most of us do. But there's a limit to how much we can work and how much money we make out of it–not to mention the fact that having a bunch of money is no fun if we don't have the leisure time to enjoy it.

So, since you cannot create a duplicate of yourself to increase your working time, you need to send an extension of yourself–your money–to work. That way, while you are putting in hours for your employer, sleeping, reading the paper, or socializing with friends, you can also be earning money elsewhere. Quite simply, making your money work for you maximizes your earning potential whether or not you receive a raise, decide to work overtime, or look for a higher–paying job.

There are many different ways you can go about making an investment. This includes putting money into stocks, bonds, mutual funds, real estate, gold etc. The point is that no matter the method you choose to invest, the goal is always to put your money to work so it earns you an additional profit. Even though this is a simple idea, it's the most important concept for you to understand.