Investing & Money
Asset classes and Investing Vehicles
Property. The thing people live, work and play in. It is building or land – and people attach value to certain properties to be valued more than what the place cost to build. I am sure I would not need to explain that we get industrial, commercial and residential property (and farms!) – and that each one comes with their own investment strategies and own pros and cons.
Stocks! Shares! The thing that made 1929 an unforgettable year and the thing that makes so many people rich! When you buy stocks (or shares), you are buying a piece of a company. If all goes well, you will share in their profits (dividends) and the share price will go up. If you would want to sell the shares at a later stage, you might be able to sell it at a profit.
Bonds – the thing that sounds like James Bond – but has nothing to do with him. If you like playing the loan shark with a bigger change of getting your money, then bond are for you. With Bonds, you can borrow money to companies. A company might want to expand, pay off existing debt (what?!) or strategically invest in something – and they need money for it.
ryptocurrencies – the bubble that everyone invested in and no one knows what it is! Yes, it’s that thing that everyone invested in and lost all their money! Crypto is what this article is about and if you have no clue what this is this article is for you. If you do not want to invest in crypto – this article is also for you! In this article, I will explore a bit about how it works (on a high level) and how you can invest in it – if you want to!
Cash! That thing we can never get enough of! Cash or equivalents – the thing we believe is money! If you love having your money liquid (that is, available at the click of your fingers), then this asset class is for you. This asset class is essentially short term loans to banks, governments and other reputable institutions who will pay back your money quickly.
Gold! Something with no use that is valuable! Yes, this metal has for thousands of years – even from the time of Sauron when he crafted his Master Ring! Gold forms part of the ‘cash and equivalent’ asset class. This means that gold could be exchanged easily and quickly to cold hard cash. Cash and equivalents tend follow the principle of low risk and low returns.
ETFs! The thing that all personal finance bloggers are raving about! Indexed funds! The thing that will never fail us (until they do)! Exchange-traded funds are a fairly new instrument and are everything any person that hates retirement annuities would love – low fees, diversified and low knowledge required.