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Invest Your Money

04/05/2010

People often have a misconception that investing money, especially buying stocks, are not safe. I heard my friends talk about stocks and they say “Buying stocks is like gambling, I would never do such a thing when I grow up”, “My dad lost a lot of money through stocks, it’s crazy”, etc.

However, I don’t think this is a prejudiced view from people who do not know what investing is. So here I am to explain how it’s not the same as playing texas hold’em. When a person directly invests in companies through stocks, there are two ways they can do it: gambling or investing.

Many of the individual investors seeking for high profit often goes all in without even knowing what the outs are. They do it because there are many books, magazines, blogs, websites luring people to blow up their money. There are numerous anecdotes how many people became a “nouveau riche”, extremely wealthy person, over night.

But, investing is something different. As people tend to think that investing brings one a lot of money, totally wrong. Investing money does not necessarily brings much money in short-term, but gives a steady profit and sometimes big one. Analyzing the value of a company and predicting the future of the company is the skill one needs. It sounds difficult, but all you need is common sense and little bit of studying.

As I had many posts about different economic effects of the events such as World Cup, it is nothing that you need specific information to know all that, but an advanced common sense that can lead you to think of the tourism, infrastructures, urbanization, and so on. Also, Warren Buffett explains tobacco companies is so attractive because with a cent, they can earn a dollar. They wrap around a piece of paper and sell it for 100 times more than what it costed them to make.

Investing won’t make a great profit and often failures when one adapts to the nature of investment, but the common sense and plus a bit of studying would result in greater fortune than any one of you have expected.

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