What Can I Invest In?

So you have heard great things about investing. Your neighbors down the street became overnight millionaires! You cousins are set to retire early with their investment returns! The stock market is going up, whatever that means! You have finally decided that you want in on the rewards of investing. That's a good place to start, but if you're a complete novice it does beg the question: what can I invest in? Chances are some things you already know (even if you don't know you know them) while other options may surprise you. Here's a brief rundown of some options you can choose to invest in:

Tangible Things

You can choose to invest your money in tangible things. One popular option is real estate. You can buy up property; as time passes, the value of that property will fluctuate. If things are going well, you can choose to then sell the property for a higher value than you paid. This kind of return doesn't happen overnight and it can be dangerous. If the property value goes down (which can happen due to anything from a natural disaster to the wrong people living in the neighborhood), you may lose money. Still, there is always the option of holding on to your investment until the value goes up. A similar situation is true of investing in gold. Often, when the economy is having a rough time, people choose to invest in gold. This is because gold is almost always considered highly valuable. So if your money is in gold, you don't have to worry about the banks losing your money or people suddenly not wanting gold. Still, the value of gold does fluctuate and unless you have your own Fort Knox, you risk being robbed (literally).

Bonds

Many bonds are the "safe" option in the investment world. A bond is basically a loan from you to whichever government or entity you are purchasing the bond from. You're basically telling them, "I'll be back for this later" and they are promising to meet that debt. The safety of a bond can generally be measured by the credit of the entity you are loaning to. The United States government bonds, for example, are considered very safe because the government has never defaulted on its loans. Returns come in the form of interest on the loan you've given, and are frequently low compared to other options – low return rates are the price generally paid for a "safe" bond.

Stocks

You hear about stocks all the time! It's on the news: the market is soaring! The market crashed. That should give you some idea of the volatility of this option. A stock is basically a piece of ownership in a company or particular commodity. You buy into a company and if it profits, you profit. If it goes into debt, you owe its creditors. You make money on the stock market by investing in companies you think will have high profits, but it involves a fair amount of assumptions and guess work; still, this is the best way to get high returns.