I m more concerned with the return of my investment than the return on my investment. Will Rogers Investing Terminology used with investing is as important as understanding the different investments. You can invest in them directly or indirectly by buying mutual funds that pool your money with money from other people. Stocks are ownership shares in a corporation.
Bonds are loans investors make to corporations and governments.
They usually pay a stated rate of interest and they mature at a future date, returning the principal. Their value is subject to change based on market conditions. Real estate is the fourth investment category, and one in which many people have built wealth. Adding sweat equity to property can help you build net worth. Diversification is investing in several different types of investments.