How to Make Your Money Work For You
At some point, everyone works hard for their money. The key to building wealth is to make your money work hard for you.
This is also called investing, one of the key pillars of personal finance.
So how do you decide what to invest in when there are so many options? There are three criteria that I like to use when evaluating potential investments:
How risky is it?
There’s no such thing as a risk free investment. But there’s a wide range among different investments in terms of how risky they really are.
For me, the key question is this: How likely are you to lose all your money? There are other forms of risk, but none as important as the worst case scenario.
A good investment has a low chance of losing everything. This is one of the key features that distinguishes investing from gambling.
How high are the potential returns?
One incredibly safe investment would be to put your money in a savings account. The…
