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How to Invest Money - Returns or Investment

how-to-invest-money-returns-or-investment

Where and How to Invest money

Investing means buying something or putting your money into something that will bring you a certain financial return from the invested money over time. Most people choose from four main types of investments, referred to as asset classes:

Shares - you buy a share in the selected company.
Cash - savings that you deposit in a bank savings account or in an investment fund offered by the bank.
Real estate - you invest in a physical building, whether commercial or residential.
Fixed interest securities (known as bonds) – you lend your money to a selected company or state.
These are the basic asset classes, however there are other ways to invest money:

Foreign currency.
Collectables such as art, antiques or central bank gold coins.
Commodities : oil, coffee, rubber, gold or corn

Contracts for difference, where you rely on the selected stocks to increase or decrease in value.
These different assets that you choose to invest money in make up your portfolio . When investing money, there is a golden rule that you should definitely follow: if you spread your invested money between multiple asset classes, you will reduce the risk that your portfolio as a whole will not achieve the desired performance.

how-to-invest-money-returns-or-investment

Return on Invested money

Return means the profit that comes from the money invested. Depending on how and where you invest your money, your return can take different forms:

Dividends (from shares)
Rent (from real estate)
Interest (from cash savings and fixed interest securities)
The difference between the amount you pay for the stock and the price you sell it for - capital gains or losses
Final advice: managing investments takes time and, of course, money. Providers of administrative and consulting services can charge considerable fees . Such fees can significantly reduce the return on your investments in the long run. It is therefore a good idea to find out these fees and take them into account.

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In the event that you do not want to hire a financial advisor to invest and want to manage your finances directly, the beginnings will be more difficult. However, over time you will gain the necessary skill and know which stocks are worth buying and when you should sell or hold them.

how-to-invest-money-returns-or-investment

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