Learn to Invest
Learn to Invest
Having already learned the first step in the world of finances, which is saving, we will take the next step: learning to invest.
Saving is good, however, let's remember that the value of money changes as time goes by, for example: the hundred dollars you saved three years ago are not worth the same today.
Indeed, they are still one hundred dollars, but what makes their value less is that the products we consume every day are also changing and increasing their value, if three years ago with those one hundred pesos you could buy four items, today you can only buy two. With this simple example you can begin to understand how the value of money is changing.
What can I do so that my saved money does not lose its value?
The first step is to take it out from under the mattress, especially if it is a long-term savings.
Then we will have two options for our money to start moving:
Open a savings or investment account, remember that with this type of accounts and depending on the banking institution, the bank could give you some interest for the time you have your money saved with them and in this way you can cushion the devaluation of your savings,
Learn to invest and in this way your money will start to make more money, giving you the possibility to increase the amounts you have saved.
What should I take into consideration if I want to invest?
The first thing we have to understand is that every investment carries a risk, depending on where you invest, it may vary according to the sector where you decide to invest and the type of investment.
On the other hand, we have a way to cushion the risks, this way is called "diversification". Whether investing in different sectors or in different branches of the same sector, this will help us when we have a loss, this will be compensated with the gains we have in the other branches.
A very important point is to be very well informed about the options available in the sector or sectors where you want to invest, as it will be very useful to know which markets tend to rise or fall according to the seasons, how the stock market is moving, or what kind of low-risk investments you could have. This will help us to reduce risks and increase our profits.
On the other hand, do not forget that there are high and low risk options, in low risk are investment accounts, or mutual funds but the interest rate is lower vs. high risk like crowdfunding (debt or real estate) or the stock market / shares.
Now that you know the options you have, it is time to get well informed about the sectors in which you want to invest to put your money to work.