Investing 101: Making Your Money Work For You

Investing 101: Making Your Money Work For You explained by professional Forex trading experts the “ForexSQ” FX trading team.

Investing 101: Making Your Money Work For You

So you’ve decided to start investing. Congratulations! Whether you’re just starting out on your own, in the middle of your career, approaching retirement age, or in the midst of your golden years, this means you’ve begun to think about your financial future, and how you might prudently manage your capital so that it can work for you.

Nobody starts out an expert, and even the best investors in the world were once sitting where you are.

Let’s start with two basic questions:

Where should you begin?
How do you begin?

Those two inquiries might seem daunting, especially if you’ve encountered the array of intimidating investing terms — like price to earnings ratio (p/e ratio), market capitalization, and return on equity. But getting started with investing isn’t as scary as it might seem.

The First Investing Step Is Figuring Out Which Types of Assets You Want to Own

Let’s start with this basic truth: At its core, investing is about laying out money today with the expectation of getting more money back in the future — which, accounting for time, adjusting for risk, and factoring in inflation, results in a satisfactory compound annual growth rate, particularly as compared to standards considered a “good” investment.

That’s really it; the heart of the matter. You lay out cash or assets now, in the hope of more cash or assets returning to you tomorrow, or next year, or next decade.

Most of the time, this is best achieved through the acquisition of productive assets.