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   Step # 6.  Invest Your Saving and
   Have Your Own Business To Grow

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Invest your hard earned money to multiply your income. Investing can be a satisfying way to translate your financial goals into realities. The trick is to select the mixture of investment that will suit your purposes and your personality.

Once you've established a business of your own and it's starting to grow, you could consider investing your hard-earned money. If you don't have any idea about investing or confusing images of busy stock exchanges and rate charts come to your mind, relax, many people have the same feelings.

To choose appropriate investments, you need to decide what your goals are- in particular, whether you're out to produce income now or are building up savings for the future. You also need to look at your own style, including your attitude toward risk and your willingness to roll up your sleeves and get involved.

The beauty of being an investor is that, you do not work for the money but instead your money working for you. Actually, investment is one way to become rich and financially free without hard work.


Why Should You Invest?

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The reason for you to invest is to have an income and gain financially. Investing is the best way to make your money work for you even when you're not working. The money you placed in an investment naturally grows without any effort on your except for your regular placing of additional money.Also, it helps you cope with the rising cost of living. If you're investing in company shares, for example, your savings will grow big enough to allow you to meet increased expenditures. Hence, investments can help you gain not just prosperity but also financially freedom.

Changing Your Life.

For some people, investing has another role: it's their bid for a different and better life: a new career, a business, a new place to live, early retirement. Many of us have at least a little of this objectives floating through our investments thinking. We enjoy toying with the idea of striking it rich. We may even have a list of places to spend the money (we developed it listening for our number in the lottery).

If your investment goal is to move to a new and different plane, you'll need to be willing to work very hard to make as much money as possible, then work very hard at finding ways to multiply that money. You'll very likely want to get much more deeply involved in the process than you would if you were investing for savings or supplementary income. You may well be willing to take the risks, with an all-or-nothing psychology. And you'll probably think about putting your money in places considerably more speculative than you look at franchises, part ownership of a business, rental property, commodity futures, stock options, puts and calls.

Where Should You Invest?

When you invest, you are placing your money on assets. An assets is something with a general market value that can be sold later on. There are two types of assets you can avail of. Liquid assets are money-based; they can be sold in a short span of time, while illiquid assists are tangible things such as land or a business which take a much longer period of time to sell. Liquid assets also have the advantage of being easily converted to cash.

You basically have three types of liquid-asset investments to choose from, namely, cash, stocks and bonds.

The Meaning of Cash, Stocks and Bonds in Investments

Apart from its regular meaning, cash is any investment that is considered safe, such as certificates of deposits, treasury bills, and money market accounts and funds.

A stock is a partial ownership in a corporation or company; as the corporation grows in profit, so does your share of stocks.

A bond is basically a loan you make to the company, and you earn the interest that the company pays you from the loan. Also, if you sell your bond before it matures (or reaches its highest earning interest power), you could also earn if the interest rates fall. That's because others are willing to pay more for bonds as it already has a higher interest rate.

In other words, if the interest rates fall, then the price of the bond increases. If the interest rates go up, the bond rates decrease. And if, for instance, the company goes through financial difficulties, the bondholder is still paid first before the stockholder.

Cash has its own advantage over stocks and bonds; when the other two are not doing so well, you can still rely on your readily available sources of cash.


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