Investment Basics

Abstract

One of the most important things you can learn in life is how to invest. It surprises me how many smart, talented people I’ve met over the years who excel professionally and personally, yet show no interest in learning this life-enhancing skill. As we’ve learned throughout this book, money is a fact of life. If you choose to ignore it, you may fall short of your life goals. We’ve spent time discussing why it’s important to save your money, but what about the concept of growing it? One of the greatest clichés in the world is, “Your money should work for you.” I couldn’t agree more. Money creates opportunities for those who have it and those who use it. If you’re the one who has it, then giving it to those who can use it creates an opportunity for everyone. When you deposit your hard-earned savings in the bank, you earn a rate of interest. That interest can accumulate, giving you the chance to spend income you otherwise would not have had. At the same time, the bank is able to take the money you deposited and lend it to others who need to buy a home or start a business. In the end, your funds create income for you and opportunity for others. Sure, this is an oversimplified and arguably overly optimistic look at investing, but the simple principle remains: Money should be put to work.