Do you want to increase your assets to help you pay for things in the future like college, a house, or retirement? How can you put your savings to work today so that it will make money for you to pay for these things in the future?

Investing is the process of buying assets in order to increase your future income. By becoming an investor, more than likely, you will increase your financial security and have a better chance of achieving your financial goals. In this module we’ll look at the relationship between risk and reward when it comes to investing. What does it mean to take risks? When we talk about something being risky it usually means it’s unpredictable or even dangerous. If you don’t do your research when choosing an investment it could be dangerous – to your wallet!

Good investments can make your money grow. You'll need to do your homework and gather as much information as possible in order to find the investments that will ensure your financial future!

Where Will You Get the Money to Invest?

Although you can invest money you get from any activity, many people commonly contribute things like savings, gifts, inheritances, and money they make from their investments. This last source is one of the best ways to make your investments grow more quickly. As we'll see later in this module, there are a number of ways that you might make money through your investments. It's important to reinvest these returns rather than spending them so that you have a better chance of reaching your investment goals.

Key Vocabulary

To view the definitions for these key vocabulary terms, visit the course glossary.

annual percentage rate(APR)	dividend	profit
bear market	earnings per share	rate of return
bond	investment	real estate
bull market	liquidity	risk
capital gains	maturity date	share
collectible	mutual fund	stock market
common stock	preferred stock	stock symbol
diversification	price to earnings ratio	stock