Being adept at investing is crucial for securing your financial future. The sooner you commence, the greater the possibility of getting rich faster. And there is over centuries-old evidence in the stock market that suggests this. Both bonds and stocks are excellent places to begin, and you can use both elements per your financial standing. So, today, we will discuss the two in detail and help you understand how they work. What are stocks and bonds? Stocks are the shares sold by a public company. It is their way of increasing their capital. When someone buys a company’s shares, they have a stake in it. They can be profitable if you buy low and sell high. However, a degree of risk is involved as the stock market is unpredictable, and prices are volatile. Stocks may also be known as corporate, common, corporate, equity, and equity shares. Bonds are loans from you to the government or company. There are no shares to buy and no equity involved. The government or company is in debt when you buy their bond. They will pay you interest on it for the specified period, after which you will receive the whole principal amount. However, these are also not 100% risk-free because if the company goes bankrupt, you will stop receiving the interest, and you may not even get your principal back.

Commodities are a significant aspect of everyone’s daily life. Some classic examples include gold, oil, natural gas, and grains. Commodities can be defined as basic goods that are interchangeable with goods of the same type. The worldwide economy is powered by raw materials such as crude oil, precious metals, and iron ore. The selling and buying price is usually determined by the “futures contract,” which is defined as an agreement between the buyer and seller.  Types of commodities There are primarily four types of commodities, these are: Metals This includes precious metals such as gold, platinum, silver, and palladium and industrial metals such as iron ore, zinc, tin, copper, and aluminum. Energy This includes coal, natural gas, ethanol, oil, and uranium. It also includes renewable energy, such as solar power and wind power. Livestock This category includes all live animals such as cattle. Agricultural products It covers edible and non-edible goods. The edible goods include grain, wheat, sugar, and cocoa and the non-edible goods include rubber, cotton, and palm oil. Commodities are volatile The commodities and futures trading market is not like the stock market and is volatile. If you are looking for a steady and stable market price, you must avoid trading in the commodities market.

A company has the responsibility towards its shareholders. It has to report everything fair and true to its stakeholders. It is, therefore, necessary to analyze the company’s financial health from its balance sheet. When making a portfolio, analysts first understand the profit margin of a company, before they add that company to their portfolio. The profit margin of a company indicates how a company’s earnings reflect every dollar of the sales. There are three ways by which one can determine the profit margin of a company. Gross profit margin A gross profit margin of a company is a proportion of company’s profit after determining the cost of goods sold. The gross profit margin is derived by subtracting the cost of goods sold from the sales and dividing the same by the total number of sales. The gross profit of a company is expressed in percentages of sales. For instance, a company has achieved sales of $50 million and the cost of goods sold is $30 million. Given these figures, the gross profit margin of the company derived will be $50M – $30M/$50M = 0.40 or 40%. Gross profit margin is the result of a company’s pricing strategy. Operating profit margin A company has to pay for other variable costs incurred such as wages and raw materials.

Often, investors fail to realize that investment is not just about stock markets, and there are other resources that give the same returns or sometimes better returns than stock markets. Alternative investment can also be referred to as an investment that is different from conventional investments. A conventional investor may invest in stocks, bonds, and cash. There may be a lot of reasons for investors to consider an alternative investment. In fact, most investors think about alternative investing as a safer way of investing. Here are some of the alternatives to investing in the stock market. Precious metals Though investing in precious metals, especially, gold, is risky, investors believe that metals have more value when sold off. These precious metals have an advantage of stock as investors can take physical possession of the asset. In times of economic turmoil or financial meltdown, these precious metals are an investor’s best friends. U.S. Treasury Securities Treasury bills are one of the safest alternatives to conventional investments. These securities come in four types, namely, bills, notes, bonds, and securities. These securities can be bought from the U.S. Treasury portal and are available in the minimum denomination of $100. Although the interest rates on these instruments are low, they are the highest-rated debt securities in the world.

Most of the times, you will notice brokers and investors using certain investing terms to communicate with each other. If you are a novice, you will have a hard time understanding these terms. But once you start the journey of investment, you will get acquainted with various terms and definitions that are frequently used in the investing world. Common investing terms and definitions Investment knowledge never goes waste. One needs to know how and in what context these investing terms must be used. Here are the most common investing terms and definitions. Asset Anything that earns you or your business money is your asset. Assets can include stocks, bonds, cash, or real estate. Balance sheet Balance sheet is a company statement that shows the earnings and expenses incurred by the company in a financial year. Common stock A type of security issued by a corporation and representing ownership in the corporation is called a common stock. Diversification The process of spreading out investments into different asset classes to increase returns on investment and minimize risk is called diversification. Equities Shares issued by a company to its shareholders that represent ownership in the company. Fixed-income fund These are mostly bonds, where there is no maturity date or any repayment guarantee.

Property investing is one of the most important and crucial decisions of one’s life. Home financing rates have dipped, and there are many investment opportunities in property. Those considering buying their dream house must have many things in place, such as mortgage plans, property tax, dwindling interest rates, credit history, and other endless paperwork. How to finance property investing Property investment requires a long-term commitment. Ask yourself, are you ready for a roller coaster ride till your mortgage is paid off? Here are a few tips that will help you finance property investing. Check your credit history If this is your first property, keeping your credit profile in shape will make your work easy. A credit score lower than 740 signals trouble waiting for you ahead. Financing companies charge fees to maintain the same interest rates for borrowers with low credit scores. Fees can vary from a quarter point to two points. You can check your credit profile from websites such as Equifax and Experian. Before applying for a loan, consult a credit history expert who can guide about how you can improve your credit score to avail a loan without any difficulty. Make a large down payment Property owners generally ask for 20% of the property value as down payment.

Generally, an investor purchases equity stocks through an online brokerage firm or directly from a broker. However, some investors in order to save brokerage fees, purchase stocks directly from the company. Buying stocks directly from the company is called a direct investment plan. Investors have their own reason for investing directly in a company such as physical possession of the stocks, eliminating brokerage services or broker, low cost, and various other reasons. How can one invest directly with the company? One can directly invest in the company, through a direct stock purchase plan, a dividend reinvestment plan, and an employee stock purchase plan. Direct stock purchase plan When an investor buys stocks directly from the company, it is referred to as direct stock purchase (DSP). Very few companies offer these services, while some may want you to be an employee of the company or a former stockholder of the company. Most company stocks are available through the brokerage house only. The advantage of DSP is that investors can save on commission since most companies do not charge them and even if some do charge; it is very low compared to what brokerage houses charge. DSP is the best for those investors who need stocks of a particular company in a small quantity.

Is it possible to grow your money with just USD 1000? Yes, money can grow as fast as you can invest. However, mere investment is not enough. Investment has to be accompanied by planning and a bit of research. Since money does not come easily, it is necessary to make the money grow in the fastest and the best possible way. Read on to know how to grow money with just USD 1000. Crowdfunding Crowdfunding is a source of pooling money and getting more in return. In fact, more start-ups are looking at crowdfunding for funding their company. Investors look at crowdfunding as a passive way of making income. There is equity crowdfunding, wherein a company asks for funds from investors in return for equities in their company. There is real estate crowdfunding, where investors can pool their money with as low as USD 500, and invest in real estate properties in return for the dividend. Real estate Real estate seems to be a good earning source especially for retirees, who do not have much income at their disposal. Renting out a property or investing in real estate can help to grow your money quickly. Equities If you can understand the markets and their changing behavior pretty well, go for stock market trading.

A real estate investment is everyone’s prized possession. It secures our life to an extent that when everything fails, we have a property, which can fetch us some dollars. It is often seen that tenants who are tired of staying in rented flats, look out for real estate investment to own a dream house. Real estate is a lucrative investment. Although real estate is highly priced, one can actually invest in real estate without the need to buy one. Tips for investing in real estate Real estate investment can be done without having to deal with real estate brokers or any elbow greasing. Since real estate always appreciates, investing in real estate is a wise decision. Listed below are tips which can help you invest in real estate, without buying an entire property. Choosing the right platform Online platforms such as Realtyshares and Fundrise let you invest in real estate properties. These properties can be either commercial or residential. The advantage of investing through an online portal is that you need not have to take a bank loan or have hefty money for buying. You can invest as little as $500 and still own a share in the property. One more benefit of using an online portal is you need not be a seasoned investor to invest in these properties.

Investment is crucial for individuals as well as families. As you start a family, your responsibilities come to the forefront. To tackle these responsibilities, you must start investing at the earliest. There will be plenty of milestones in your family life, such as buying the house of your dreams, hospital expenses, the birth of a child, and college expenses. If you have safe and sound investments in place, life will be easier financially. Sometimes, young families get so absorbed in their careers and in enjoying life, they tend to ignore some investment aspects that will secure their future as the family expands. Long-term goals While planning for investment, focus on your long-term goals. Social security checks are inadequate to cover for day-to-day expenses. Long-term funds and bonds are good. The money is locked for a longer tenure, say a 10-year period, at a specified interest rate. Pay off debts If you are planning to retire comfortably, the best way to start investing is to start on a clean state. By paying off your debts, you will pave the way for more savings. Start by paying off debts like credit card, student loans, or car loans, which carry high-interest rates. Save for retirement Even though your retirement is decades away, there is nothing better than a good old 401 (k) plan and Roth IRA plan.

Some youngsters start investing as soon as they start working. Investing early is beneficial and once you get the hang of it, there is no stopping. When you start investing at a young age, there are a lot of ideas and future plans while making an investment. Mistakes are inevitable and they are a part of your investments. With time, you realize and look back at what went wrong while investing the last time. Investments are all about trial and error. Here are some investment techniques that determine your growth as an investor. Extensive research The fact that you started doing research, by wanting to know everything about where you are investing, and every little technicality, prove that you have indeed matured as an investor. When you do some research or understand the fundamentals, you are more likely to incur less loss. High risk appetite You have accepted the fact that you are no longer a conservative investor and are willing to undertake risks with any investment. You cannot gain as an investor if you do not take a risk. Risks will help you judge where you stand as an investor. Once you are out of your comfort zone, you can see your growth as an investor.