|Celestine Chua What the Rich Invests In “The rich invest in time, the poor invest in money.” ~ Warren Buffett|
In addition to Savings and CD’s, financial institutions also offer investment products.
The 3 basic areas are:
- Mutual Funds.
A. The company pays you when it makes profit; this pay is called a dividend. This could be higher or lower than standard interest.
B. You can sell stocks at a price higher than you paid for them. You buy a share at $6 and sell at $8 you make $2.
A mutual fund is where an investor buys many products which vary in type and degree of risk. The funds adviser then sells a share of that group of products. This is called a Mutual Fund. These funds may include CD’s, Stocks, Bonds, and other investments.
There are different risk levels and therefore some are more stable while others have higher return potential.
If you’re just starting out you could buy one or two shares at a time, just to see where it goes. It’s like playing a strategy game at that point. As you get used to how things work you can put more money into it. I really enjoy penny stocks (Stocks Valued for less than $1 per share). It’s an easy way to put just a few dollars, $10-$20, into the market and watch it grow or shrink without really risking anything important.
~Playing it Safe~
However, that money can also earn you a lot more returns than a simple savings account.
Use money you are willing to loose.
This sounds like a silly thing to say.
Why would I want to lose money?
It is a silly thing to say.
Then again you spend money on games, TV, Movies or other entertainment without any monetary return all the time. You do this because there is a return of enjoyment.
Consider this your entertainment money. So you aren't losing money you are spending it. I say anything I would spend on disposable products can also be trading money. If you can spend $25, $100, or even a $1000 to eat or watch movies or go on trips then you can spend it to trade.
Dave feels more secure with Mutual Funds than I do. Then again, I have a negative outlook on the future of the USA, whereas, he feels things will continue to be the same in 10-20 years.
For the money I do invest, I use his four fund approach (HERE).
Ultimately remember these points about investing:
- Investments CAN lose money…
- Do not buy anything until you have prayed it through thoroughly! Make sure that God said: “Yes!”
- Consider that your money should be working for you, not you working for your money.
*Given the changes occurring in the world today, it could also be wise to seek other things to invest in.
Property, Gold, Silver, Farm/Produce production, and other things of tangible value.
When the markets do someday collapse and the world goes through change having debt free commodities that are innately valuable, such as those used in the barter days I spoke of in the beginning of this book (HERE), could be a great thing to have on hand.
Gold and Silver, if just bought for value should be bought in bulk sizes. However if bought for the potential of trading in a pinch should be bought in small sizes such as 1/4 or even 1/8 of an ounce.
My bet would be on agriculture (farming). Food is always barter-able.
The Insider is a BIG fan of Dave Ramsey:
- Go read/listen/watch Dave Ramsey and he'll teach you how to do it right!
- Listen to The Dave Ramsey Show (HERE)
- Or by his most popular book: (HERE) The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness