Wealth Creation Investment and its Types

Investment is the act of utilizing money in exchange for new assets, with the expectation to earn substantial income over time. This is generally done to create wealth for future. Gold, property, mutual funds, shares, FDs, etc. Many online investment plans can be actually explored for actual investment.

Types of Investment - MYMONEYSTORE

Highlighted below are the investment types for your consideration:

• Stocks
• Bonds
• Cash equivalents

There’s both direct and indirect way of buying the above named investments. The indirect way is generally routed through mutual funds. Anyone is permitted to make their investment online with the help of supporting portals. Investment via mutual funds is undoubtedly preferred over direct involvement. Mutual fund investments not only automatically take control of the money pooled but also manage it really well. The other way is to invest in tax-deferred options, like an IRA/annuity.

Stocks

Most large giants raise and sell shares/ stock to gather funds for their initial work and operations. Buying a share means becoming a party to the company’s ownership. Now you’re a licit shareholder to the company. Below highlighted are the common two forms of stock.

Read more about Stock Market Investment

Common stock 

These participants have share ownership and possess the right to vote on critical matters. Some are also entitled to receive dividends in return.

Preferred stock 

Generally, these shareholders receive dividends at pre-determined time intervals. Returns and risks both move hand in hand. Also, it changes with the type of stock.

Bonds

Purchasing a bond is as good as giving out money to a government entity and company. Government investment plans and bonds are the most popular.

Bonds are raised for set out time periods in return for the prescribed interest amounts. The issuer of the government bond determines the interest rate at the time of bond issuance. This interest rate can be either fixed or variable.

Bonds are supposedly more uniformly rated as compared to other stocks. They guarantee a regular flow of money. The rewards will be far more in case of stocks because of the high risk quotient.  

Read more about Government Bonds 

Cash Equivalents

Investments into cash equivalents can be as good as investment in cash due to the high level of liquidity. It allows an easy and simple way to reach cash at the time of need. Cash equivalents are as under:

• Saving accounts
• Money market deposits
• CDs

This form of investments can give out a fixed rate of return. Though, these are short lived and not assuring!