Basics
Investments
This might not sound as fun as the strategy to attract that really good looking guy you’ve had your eye on, but the money you save will probably last a lot longer than your interest in him!
We’ll review the basic types of investments as well as different types of accounts and why you would use them.
Stock Market
Before we get started trading stock, let’s make sure you understand the components of a stock. Sorry if this seems elementary, but I want to make sure you understand the basics first. Of course, buying stock means you’re buying a piece of ownership in a publicly traded company. Wouldn’t it be great to tell your friends that you own part of the Moet Hennessy Louis Vuitton company?! Champagne and handbags, what more do you need?!
A couple of months after I started at Fidelity Investments in the year 2000, our country suffered from the .com bubble crash. By the way, this is right after we survived the Y2k scare! Not only did we survive, but we figured out which technology companies were sustainable and which ones weren’t. Many of us have invested in those companies and have done quite well. Only 8 years later, our country suffered from the housing collapse. This collapse was systemic and even more severe.
As a general rule, it’s better to take more risk with long term investments versus money you need to use in the next couple of years.
Do you continue to spend even though you’re on the verge of financial ruin?!