Investing 101 Essay

2884 words - 12 pages

Day in and day out the cost of living continues to grow, inflation seems to be getting out of hand and at the same time, salaries just are not matching up. Individuals were taught by their parents, teachers or mentors that one needs to be educated, have a great work ethic and save for their retirement and by doing this they should be fine in life. Unfortunately, these individuals are seeing that times have change and now things are not quite the same as it was once thought. Not only is our economy struggling, but businesses are closing their doors causing unemployment to rise, meaning the job market coupled with salary growth are making it very hard for people to feel confident with their future. Everyone has seen other people struggle, homes foreclosing, entire savings accounts and/or 401K’s being depleted making many people think that something has to change. Most people these days are reluctant to investing into the economy due to this recent turmoil the market has taken, but with the right understanding, newcomers can develop a great portfolio by understanding how to invest. Times have changed from what they once were, the government is not helping as much and employers are contributing less and less into an employee’s future. With this said, it takes goals, motivation and the wiliness to learn something new out of one’s comfort zone to build their own future, their own retirement, their own life. Having the right understanding to what investing is by starting with the basics and being introduced into something that has made others become millionaires, any person can build their own worth and a life of comfort. So let’s talk about investing!
It is important to have an understanding as to what investing is and what investing is not. Additionally, when looking at investors, it makes more sense to study an investor whom always sticks to the basics, does not get complacent or arrogant, tells you how it is and does not fly by the seat of their pants and for this we will be introduced to the ‘Oracle’ (Kennon, n.d.) of investing, Mr. Warren Buffet.
In any capacity, investing means to have money work for an individual on its own. A defined thought is “an asset or item that is purchased with the hopes that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or appreciate and be sold at a higher price” (Investopedia, n.d.,p.1). Any individual interested in this concept needs to first understand that this is not a get-rich-quick scheme, there is no such thing and if there was then everyone would be doing it. On the other side, investing is not gambling as long as you are smart and research your directions. Gambling is when someone puts their money at a high risk by playing against odds with an...

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