Girls That Invest

5What's your type (of investment)?

Let's get into what it's like using the stock market to grow wealth.

A good place to start is to understand what investing is. In its simplest form, investing is the process of putting your money into something with an expectation that it will make a return. The word ‘expectation’ is important; it's not guaranteed that you'll make a return on your money, even though that's the only point of investing. You could put that money into real estate, a stock or even into a Birkin bag collection; all of these are forms of investing, because money is being allocated with the goal of not only getting your money back but making a return as well.

That's it.

Investing is just the idea that you throw some money into something, and you hope more money comes out.

No men in suits in sight.

There are many different ways to invest your money, but I'm going to break down the most popular ones you'll come across:

• stocks/shares
• bonds
• mutual funds
• index funds
• ETFs
• REITs (real estate investment trusts)
• hedge funds
• commodities and alternative investments.

Stocks/shares

Firstly, ‘shares’ and ‘stocks’ are interchangeable terms. In North America they're often referred to as stocks, while ‘down under’ we go by shares.

A share is simply a small piece of a company; when a company sells a portion of its ownership, it does so by issuing stocks/shares. When someone says ‘I'm investing in Apple' it means the same thing as ‘I'm buying Apple shares'. It also means ‘I'm ...