Investing in stocks and bonds is one of the best ways to become wealthy in todayâ€™s day and age, because of the wonders of compounding interest. A wise investment can give you the riches of world whereas investment in an already mature stock can take every single penny out of your pocket. Investing stocks and bonds gives you long time financial stability.
What are stocks?
Shares of a company are referred as stocks and if you hold a stock of a company you become a stockholder. A stockholder owns a proportion of a company, and he may be paid a share of the company’s earnings in the form of dividends. Stocks are high risk high reward.
What are bonds?
These are mainly issued by the government and those who buy these bonds are basically lending money and getting paid as per fixed interest rates. Bonds provide fixed income on investments.
Before investing in stocks and bonds you must understand the difference between trading and investing. Investing is when you keep your money in one particular share and wait for months or years for the stock to mature, whereas trading is when you invest or buy a particular share for a short period of time, may be days or couple of weeks.
Investing in stocks and bonds becomes another means of income. Sometimes people choose to invest in real estate, but that is equally expensive and takes a large chunk out of your pocket in brokerage. Stocks and bonds are seen as a better way of investing for future, for retirement, to buy luxuries and of course houses and apartment.
Investing in stocks and bonds have been made fairly easy now with tips, advice, technical charts, graphs and counsel available online and over the phone. You must keep the track of the companyâ€™s performance as well though the broker will be informing you about the stock and its movement.
Remember, when it comes to investing, nobody can do this better than you can. The worldâ€™s top investors all have educated themselves financially in order to profit from the market.
You will never make as much money relying on other people as you can yourself. Do your own research, and find the right stocks for you and your portfolio to help you become wealthy.
To learn to invest money and for other investing advice, try checking out http://www.online-investing-tips.com. This is a popular investment site that gives money investment advice to help you achieve financial freedom.