How to Invest Your Money

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Written By Tabrez Ahemad

Investment is more than just saving money in your bank account. As deposit rates are low, we need to invest our money to generate higher returns to overcome inflation. For most individuals, shares are the most common type of investment, which enables them to gain higher returns on their savings. One benefit to investing money is due to capital growth; this is the way shares can make higher returns. 

As we invest money into a business and its profits grow, our investment value grows too, also known as capital gains. The dividend yield is another advantage to investing money, as shares can make us revenue when invested. Companies that profit can choose to reinvest or pay dividends; we look for companies that produce these as we can reinvest and earn more shares. Another reason to invest is that we can purchase or sell shares whenever we want; this can be done reasonably quickly through online trading services. This process is also known as liquidity.

Basics of investment

Firstly, an essential investment product is stocked; these are dividends and capital gains, as seen above; also, voting rights where shareholders have the right to vote in general meetings of the company they invest in and have control over board members’ implementation management. Another type of investment product is bonds; these create a predictable income stream where investors know how much income they will receive and how often they will revive their income. 

Also, bonds create lower potential returns as bonds are safer and more trustworthy than other assets. It is also essential for individuals to know about stock analysis before investing in a company; this is when an investor study’s the data to determine if a company is worth or not to be invested in, and there are two main techniques to carry this out. Firstly, fundamental analysis looks at businesses’ data and helps those potentially supporting decide if the company is worth more than presented. 

Another type is a technical analysis which involves potential investors analyzing the businesses’ past market activity, prices, and profits to see where the company’s future is leading to and work out the future stock price, usually done by those interested in investing for a short time.

How to start investing

To start investing, an individual needs to begin with two accounts: a CDP account and a trading account. A CDP account, a central depository account, helps keep the shares you have bought safe and protected. On the other hand, a trading account needs to be opened before your first investment, as it allows an individual to buy and sell shares. Over time investors can open as many trading accounts as possible and come with different brokers who help manage their accounts. Brokers can help to set up these accounts as long as you are eighteen years old and have never been bankrupt. More information can be found at

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