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Investing

money tree imageAs you save money, you're smart to put some in investments – they can earn more money than a regular savings account. Money you set aside to invest is money that you will not need for emergencies or everyday expenses. Investments are for the long-term – years into the future.

As you learn more about each kind of investment, you'll decide which ones might fit you best. Some are riskier than others. You could lose some or all of your money. Some investments let you take your money out more quickly than others – that's called liquidity.  Investments offer different rates of return. You must weigh all of these factors before put your money in any investment.

It's smart to divide your money among different kinds of investments. This is called diversification. When you put your money in different places, you lessen your risk. While one investment may lose value, others may not. Risk & Rewards explains this in more detail.

The good news is that you can learn about investing without using real money. Make up a fantasy account of $10,000 and track different investments for a year or more. This is the best way to learn. Do this with your parents or with a couple of friends that share your interest.  Along the way, you will gain an understanding about the world of business and finance.