There are many things you can invest in but here in this article we will cover only then main and most popular things you can invest in. And with that being said lets start the article.
This field here is probably the most popular one and the field which everyone imagined when they read the title of this article.
Stocks are basically small portion of ownership of a random company of your choice. Companies use selling stocks in purpose of raise money for whatever reason they might have.
The price of stocks depends on couple of things. But that’s an topic for a other day.
This one is another big one in this field. Mutual funds are basically a variety of investments under the management of a specific company.
When you buy into mutual funds you dint choice what stocks you want to own, the managers and the people in charge for the multi fund you buy into makes that decision for you.
Mutual funds offer you a mix of various different investments which is good in a way but it is also bad because you have less control over your investments.
This one is less popular than the two above, but it is also in the top most popular investments.
A bond is something like a loan which you make to a company or government entity. Which really sounds really sketchy at the beginning but trust me its legal.
When you make that loan, you are paid back for the loan in a certain period of time and in the meantime before you get paid back full loan you earn interest.
ETF if you didn’t know stands for “exchange-traded funds”. ETFs are basically index funds which are a basket of investments which may include everything from bonds, stocks and commodities.
The only way to buy or sell an ETF is through a broker. The reason many people who invest choose ETFs over mutual funds is because the fees are normally lower with ETFs than with Mutual funds.
ETFs provides diversification similar to a mutual fund and are easy to trade investments like stocks.
Traditional IRA and a Roth IRA
These two are the same but with some who different terms and a little bit different types of action.
These are basically tax-advantaged retirement accounts.
This one is the last one we will talk about today.
A 401(k) is basically an employer-sponsored retirement account.
Most of the 401(k) plans are a mutual fund. This plan as well has a tax advantages.