Possibly one of the most used way of making money today, besides jobs, is investing. Investing means giving money to a company; and when you pay money to anyone, you’re buying something. So in this case, you’re buying a part of the company. There are 3 main “categories” in investing: long-term investments, short-term investments, and day-trading investments. These are types of investments that are classified by the length in which you want them for… i.e. – “hold them”, until you sell them (hopefully for a profit). When you look for investments, you can choose a “guideline” for you to follow, buy buying into one (or more) of these 3 categories. Let’s start with long-term investments.
Long-term investments – As you may have guessed, these are investments which you plan to hold for a long time (many years, usually). This investment is chosen on the foresight that this investment will make you more money in the long-term, rather than the short term; the investment is also chosen on the “risk factor”, something that will be covered in part 2 of this post series 
. I currently hold a diverse portfolio of investments (diverse, meaning both long and short-term investments), and I chose so because of age. I believe I began investing at 11 – at that age, for about 5+ years, I wouldn’t need a lot of money. So the majority of my portfolio (my investments) is comprised of long-term investments. However, there is also a different type of long-term investments: when a company invests heavily into another company, it receives a large impact in the company it has invested in. If the investing company wants to keep that impact, their investment would stay for a long time, with some companies never actually selling their investment. But the first definition is more relevant to personal investing.
Short-Term Investing – A method of investing for a short time, in the hopes that it will make you a lot of money (like any investment). It’s also chosen on the “risk factor”, but again, that’ll be covered in part 2. Sometimes these investments can last for less than a year. I like to categorize these investments as “rapid”.
Day Trading – Day trading is a very short-term method of investing. It’s most commonly used by people on their computer at home, where one person may buy stock, then can sell it very quickly to others. It’s not “traditional” investing, but it sometimes can lead to rapid riches. However, this is unlikely.
The “risk factor”, and how it relates to investments, will be discussed in part 2
Sorry for those who saw this uncompleted posts, I hit “publish” by mistake :
June 26th, 2009
I look forward to hearing about the risk factor part. There’s actually a lot of risk involved in all types of investing, and I find that long-term investing has a lot of risk, like when the economy tanks :/
June 26th, 2009
Absolutely. Whenever you spend money, you’re always making some sort of risk!
June 27th, 2009
I never really understood the principle of investing, so this is a really great post for a newbie like me. Would long term investments be better than short-term if you are young? Since I’m 16, should I be focusing on stuff that will earn when I’m about 21?
I guess one could think of this in terms of websites as website flipping versus making established websites? Kiwidia might be a long-term investment whereas a blog to flip would be a short-term investment.
June 27th, 2009
I chose to have more of a long-term portfolio because I’m young, and it makes more sense (I don’t need a lot of money, compared to later). Evaluate all your financial goals: Do you want to have a car? Do you want to go backpacking across Europe? Do you want to go to university? Then ask yourself: “When do I want to do this?”… if it’s within 1-1.5 years, I’d reccommend short-term. If it’s more like 3 years, then long-term is my recommendation. However, there’s a risk factor, that will be explained in the next post
Yeah, investing doesn’t have to be just money. it can be time, energy, or anything else (Time = money
). Website flipping, however is a pretty solid business, if you have experience. I don’t know how much a long-term blog would make; if you’re in it for the cash, evaluate the potential profits from both types of blogs. If you’re in it for the community/little cash, I’d say a long-term investment (long-term blog) is for you. Kiwidia is a long-term investment on your part, but also a business. It’s easy to get those 2 mixed up, because they’re really similar.
June 27th, 2009
I have some of my own long term investments done is companies in my country, however, the recent economic downturn has really hurt my dividend payoffs. I had also started exploring day trading recently and glad that I can now read some tips about it from you. If time suits you, I will really appreciate a detailed post from you regarding “day trading”.
June 27th, 2009
I think that I could do such a post. I don’t actually day-trade, but I know a bit about it and can also do some research. What country are you from?
July 1st, 2009
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