What Is Investing? : An Introduction For First-Timers

November 06, 2020 by Dan Green

To invest means to put your money to work instead of letting it just wait for you within your bank account. This plain-language explanation of how investing works teaches you the basics.

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Episode Transcript

I’m a pretty good saver and one thing I’ve learned is that saving is a great way keep your money, but it’s a terrible way to grow your money.

When I want to grow my money, I invest.

To invest means to put your money to work.

Instead of it sitting all lazy-like in a bank, where it pretty much does nothing, you give it to companies who use it to grow their bottom line.

And, when those businesses grow and earn money, you earn money, too.

It’s amazing to watch this work.

[CHART] Let’s say you had a 5-year plan to set aside $100 each month.

Look at these differences.

Money that’s invested can grow so much faster than money just at the bank.

Now, it’s important that I tell you — investments don’t always grow your money. Sometimes, they lose it.

That’s why, when I invest, I play it safe.

I never invest in just one thing. I spread my money out.

That way, I’m protected in case any particular investment goes bad.

It’s safety for me because I’m not a risky person and I don’t want to have to work for the rest of my life.

Investing is how I’m going to to make that happen.

So put your money to work and get started. The longer you’re invested, the more your money can grow.

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