Making money through investing is not free. It might seem like free money because you don't have to go to work, do your job, and then get a paycheck. In actuality you are paying for it with your time. When you decide you want to buy some stock, you don't just think it and watch it happen. You have to find a broker, research the stock you want, and pay a commission. That is not free.
One of the easiest types of investments are mutual funds. With a mutual fund several to hundreds of people pool their money together. A fund manager uses this money to buy lots of different stocks and/or bonds. With some mutual funds, you have to pay a commission, usually as a percentage. For example, if you earned 9% this year and they charge a 2% commission, you will only earn 7%. On the other hand, you could invest in no-load funds and pay no commissions.
When you aren't charged fees, you save that money you would have normally had to pay plus, you can earn more income on that money you saved. The more you save, the more money you earn.
Invest your money and you put your money to work. When you save on commission, you have more money working and earning for you.
Investing also can cost you a lot of your time. When you buy a stock, you shouldn't just choose one out of thin air, you should put several hours into researching it. This is a cost of several hours for each stock. If you don't do the research, you are increasing the risk and possibly limiting the amount of money you'll make.
Just researching is not enough. You have to know how to research first. This will take a certain amount of time in education, whether through books or a college degree. It can take from 100 hours of reading and studying to 1000 hours of formal education. This is valuable time that could be spending at countless of other places.
Mutual funds save a lot of time. You don't have to research, aside from choosing the initial fund, and you don't have to know how to research. With a mutual fund, the fund manager, who is likely an expert, does all this for you. You save hours and hours of your time. You make the initial choice of a mutual fund and let the manager do the rest.
You could go with a loaded fund. Some claim they will get you a higher return, but they often don't. In the end, you earn less because you'll probably earn about the same plus you'll pay a fee. Investing in a mutual fund will save you a lot of time and money.
One of the easiest types of investments are mutual funds. With a mutual fund several to hundreds of people pool their money together. A fund manager uses this money to buy lots of different stocks and/or bonds. With some mutual funds, you have to pay a commission, usually as a percentage. For example, if you earned 9% this year and they charge a 2% commission, you will only earn 7%. On the other hand, you could invest in no-load funds and pay no commissions.
When you aren't charged fees, you save that money you would have normally had to pay plus, you can earn more income on that money you saved. The more you save, the more money you earn.
Invest your money and you put your money to work. When you save on commission, you have more money working and earning for you.
Investing also can cost you a lot of your time. When you buy a stock, you shouldn't just choose one out of thin air, you should put several hours into researching it. This is a cost of several hours for each stock. If you don't do the research, you are increasing the risk and possibly limiting the amount of money you'll make.
Just researching is not enough. You have to know how to research first. This will take a certain amount of time in education, whether through books or a college degree. It can take from 100 hours of reading and studying to 1000 hours of formal education. This is valuable time that could be spending at countless of other places.
Mutual funds save a lot of time. You don't have to research, aside from choosing the initial fund, and you don't have to know how to research. With a mutual fund, the fund manager, who is likely an expert, does all this for you. You save hours and hours of your time. You make the initial choice of a mutual fund and let the manager do the rest.
You could go with a loaded fund. Some claim they will get you a higher return, but they often don't. In the end, you earn less because you'll probably earn about the same plus you'll pay a fee. Investing in a mutual fund will save you a lot of time and money.
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