Re:In Investing, It’s When You Start and When You Finish (2011)
by dredmorbius on Monday October 17, 2016 @05:37PM
(#12730020)
Consider putting your money into a business you know, equity, or rental property.
The idea is that rather than holding liquid exchange media (money), you make that money work by investing it on a productive venture.
Investing in the stock market (or an index fund) is similar in many regards to starting your own business or putting the money into a partnership or investment property: you're investing financial capital (giving someone else the ability to buy stuff -- liquid exchange medium) in return for an ownership interest in the return.
On balance, investing in stocks is cheap, has little by way of management obligations, and (notable exceptions notwithstanding) tends to produce pretty good returns over time, especially as compared to holding cash. Your investment is also fairly liquid, as stocks themselves can be sold (converted to cash) at any time.
No, it's not risk-free. But it's a pretty decent risk, and in general you're in the same boat as everyone else.
The idea is that rather than holding liquid exchange media (money), you make that money work by investing it on a productive venture.
Investing in the stock market (or an index fund) is similar in many regards to starting your own business or putting the money into a partnership or investment property: you're investing financial capital (giving someone else the ability to buy stuff -- liquid exchange medium) in return for an ownership interest in the return.
On balance, investing in stocks is cheap, has little by way of management obligations, and (notable exceptions notwithstanding) tends to produce pretty good returns over time, especially as compared to holding cash. Your investment is also fairly liquid, as stocks themselves can be sold (converted to cash) at any time.
No, it's not risk-free. But it's a pretty decent risk, and in general you're in the same boat as everyone else.