Investing

Investing is the art of using money to make more money. It can be considered an alternative to spending time or effort to earn income, or to making money by earning an hourly wage. While it is the use of money that defines the process, investing may still require a certain amount of time and effort. Investors who are unprepared to spend the time or effort required to manage their investments may hire investment managers.http://wordnetweb.princeton.edu/perl/webwn?s=investment

Investments can include physical objects such as property or vehicles, currency, commodities, stocks and bonds, or financial derivatives (options or futures). Investing involves financial risk, and can lead to ruin if not properly analyzed beforehand.

Though investments come in many different forms and are marketed with many different objectives in mind, there are just two basic types of investments to choose from:

1. Ownership Investments: These are investments where the individual has part ownership in a company or a piece of property.http://www.extension.org/pages/Investing_Unit_4:_Ownership_Investments This type of investment is accomplished by purchasing stocks, growth mutual funds, and/or real estate. Ownership investing is a way to give the investor partial control the investment. If a company is owned, the investor may vote for the board of directors and thus influence the future of the company and the way it is run. A investor in real estate may make improvements on the property or make adjustments in the rent to increase profits. If the the value of a piece of property goes up the investor may choose to sell or hold. Ownership in companies may also provide earnings for the investor, dividends may be paid on stocks owned.
2. Loanership Investments:http://www.extension.org/faq/29189 These investments are those where the investor lends their money to someone, such as the government or bank.http://www.extension.org/pages/Investing_Unit_4:_Ownership_Investments The money is then repaid with interest. In this investing the owner of the money does not have a say in how the money is invested. The organization that was given the money takes it and invests it as they see best. This type of investment often requires a larger amount of money invested for a longer amount of time than ownership investments.http://www.extension.org/pages/Investing_Unit_4:_Ownership_Investments

Investing is the process of using money to produce a profit.http://wordnetweb.princeton.edu/perl/webwn?s=investment Investing in the United States can be traced back to over two hundred years ago when the government sold bonds to finance the war against England.http://www.nyse.com/about/history/timeline_chronology_index.html However, the New York Stock Exchange was organized in 1792 when a group of 24 merchants got together and decided to meet daily to trade the shares that private banks had begun to issue in what is called the Buttonwood Agreement.http://www.nyse.com/about/history/timeline_chronology_index.htmlThere are many forms of investing and those that people most associate with investing nowadays are stocks and bonds, real estate, or mutual funds, 401(k)s, and IRAshttp://www.extension.org/faq/3114

The content on this page is not a substitute for professional advice. Please contact a finance professional before using the information presented here.