What is investing?

Your guides introduce the basics of investing.

Instructional Text

Putting money in a savings account is one way to make it grow. Investing is another. Image Description

The main idea behind investing is to put money you’ve saved into things you think will go up in value over time. Things like stocks, or bonds, or real estate. The trick is to buy when the price is low, then try to sell when the price is high. That’s how you make a profit. Image Description

One big difference between saving and investing is that investing always involves risk. If the value of your investment goes up, you could earn more than you would in a savings account. But if the value goes down, you could lose some or even all of your money. That’s why you should never invest money that you can’t afford to lose. Image Description

And that’s why before you invest, we want to make sure you know the basics of what investing’s all about and how it works. Just click the Next button to get started. Image Description

Return on investment (ROI) = The $ income that an investment produces for the investor.

Any time you sell an investment for a profit, your earnings are called capital gains. If you lose money when you sell your investment, you’ll have what’s called a capital loss.

After you’ve finished this section on Investing Basics you’ll be ready for Get Started With Investing. Click the Next button to compare saving and investing.

What is investing? Saving vs. investing Types of investments Types of investments … continued Inflation erodes purchasing power Compounding grows money The Rule of 72