An Introduction to Investing: Going Beyond the Coffee Can

An Introduction to Investing: Going Beyond the Coffee Can

What comes to mind when you think about investing? A rusty coffee can with a hole in the top or a charming pink piggy bank that makes a little oink sound when you put in a quarter? Now that you are a parent to an eight-year-old, it is probably time to start planning for your financial future so that you and your children can enjoy a comfortable old life.



To begin, a piggy bank is just a place to put money aside; it is not an investment vehicle. When you save money, it means you are letting it build up on its own; in other words, you earn money and set it aside. Without a doubt, that is perfectly acceptable. We all have insufficient funds to do anything with, but if you want your money to truly grow, you need to invest it. That is, put your money somewhere it can grow even if you do not do anything to contribute to it. Money saved "goes to work" and grows in value over time, whereas invested capital "goes to work" and generates interest and other returns.



Financial Markets



Buying a "share" in a company is the real deal when it comes to investing in the stock market. Any amount of stock, even a single share (assuming that is how your company sells its shares), can give you a stake in the business. You start to care about how well that firm does because of this. Surely the proprietor of a store will have more money in the bank at year's end if the store turns a profit? The stock market is no different. As a co-owner, you stand to gain financially if your business experiences expansion. Obviously, the majority of stockholders are not hands-on with the day-to-day running of the company; the idea is to buy cheap and sell high on the shares.



The possibility of making a larger profit grows exponentially when you include more shares of stock in this calculation. If your investment is more, your output per unit of work can be higher as well. This is not to imply, however, that one needs a windfall of millions to partake in the stock market.



Unless they have always had access to capital and have seen their parents' riches at work, most people who want to invest will have to start small. Yes, there will be bumps in the road, but starting an investing portfolio is essential if you do not want to put in a lot of time and effort to save up.



Before investing in a company's stock, it is wise to learn as much as can about the business. This will provide you peace of mind when you decide to buy into the firm. Finding a reliable stockbroker is just as important as doing your own research. Expert stockbrokers can help both newcomers and seasoned traders navigate the market's daily ups and downs by reading the patterns.

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