Investing For Dummies®, 5th Edition

Chapter 1. Exploring Your Investment Choices

In This Chapter

• Defining investing

• Seeing how stocks, real estate, and small business build wealth

• Understanding the role of lending and other investments

• Knowing where not to put your money

In many parts of the world, life's basic necessities — food, clothing, shelter, and taxes — gobble the entirety of people's meager earnings. Although some Americans do struggle for basic necessities, the bigger problem for most Americans is that they consider just about everything — eating out, driving new cars, hopping on an airplane for vacation — to be a necessity. I've taken it upon myself (using this book as my tool) to help you recognize that investing — that is, putting your money to work for you — is also a necessity. If you want to accomplish important personal and financial goals, such as owning a home, starting your own business, helping your kids through college (and spending more time with them when they're young), retiring comfortably, and so on, you must know how to invest well.

It has been said, and too often quoted, that the only certainties in life are death and taxes. To these two certainties I add one more: being confused by and ignorant about investing. Because investing is a confounding activity, you may be tempted to look with envious eyes at those people in the world who appear to be savvy with money and investing. Remember that all of us start with the same level of financial knowledge — none! No one is born knowing this stuff! ...