Investing wisely

Written on :

Investing? Not a big deal, is it? All one needs to do is find a great deal, invest some money and make really good returns. That's what I used to think until I realized MMM would fit that definition. and MMM is clearly not what investing is. It was simply a ponzi scheme where you rob peter to pay paul and no value was created in the process Investing is making a decision to add value to an entity with a need. The entity, as a result of the investment,  increases in value as a result of the value added and provides good returns for what was invested. In that way, there are various ways to make an investment. You nay decide to take up an ownership interest. That would be an investment in stock publicly (on the stock exchange) or privately (that would be private equity) or you may decide to take up a financial interest. This type of investment is a debt owed to you. You are not interested in ownership, however you want to provide assistance in that way, you get a stake and earn returns. Examples of debt instruments include certificate of deposits (also known as fixed deposit), bonds and  treasury bills.