Investing 101

We are sure you have seen it on TikTok, Instagram, and various other places, learning to invest is starting to feel like the newest craze. But this is something that has actually been around for quite some time. The New York Stock Exchange, which is the most well-known, actually dates back to 1792. However, with the uprising of investing apps, crypto, NFTs and more, it’s becoming more and more accessible to everyone at any financial stage of life. Plus, this is a great way to plan for your future as your money has the potential to grow.

What is Investing?

Let’s start with the basic definition of investing. It’s simply using money to earn a profit. Usually, the first thing that comes to mind is the business suits, the bell, and the yells of BUY and SELL. But not anymore. Investors are actually considered anyone who puts money in an account or property with the goal of making a profit. No matter your budget, there are many types of investments that can work for what you need.

Types of Investments

There are many types of investments to get started. Let’s break a few of the common one’s down:

• Stocks and Equities: Equity is money invested in a company by purchasing shares. This may or may not be public. Stocks are tradable shares available through the stock exchanges.
• Certificate of Deposits and Bonds: This can feel like a loan in reverse. Bonds are essentially loans you can make to a company, and CDs are a type of savings account where you agree to lend your money to a bank or credit union for a certain amount of time in exchange for a higher yield. This can be a way to get a modest return with little risk to your principal amount.
• Tangible Assets: These are your physical items such as silver and gold. A more common example is real estate. 
• Cash and Cash Equivalents: These are assets of a company that can be converted immediately to cash.
• Mutual Funds: This type of investment is a mix of stocks, bonds, or others. This allows people to join funds to buy into a professionally managed portfolio at a lower price than they would on their own.
• Cryptocurrencies: Bitcoin may be the most well-known. This is a digital currency that is secured by cryptography protocols.
• NFTs: Non-Fungible Tokens are unique digital items that are tracked the same way as cryptocurrencies. This can be music, animation, art, etc.

Am I Ready to Invest?

There are a few boxes to check off before investing. You want to make sure you’re financially fit before taking too many chances.

Get yourself prepared. Make sure your high-interest debt is paid down to a manageable level. Prior to investing, you should also make sure you have your emergency savings fund built up. Still need some help? That’s perfectly ok, set up a meeting with our financial wellness team to help you achieve these goals!

Once you have those settled, start putting some cash aside to invest. Start small and grow from there. You can investigate your options and plan how much you are wanting to invest, types of assets, and what your main goal looks like. Don’t forget to research the risks for each asset, as they aren’t all the same. Each one has different risks and benefits.

Want to Learn More?

Check out our newest moveUP modules here to learn more about investing, the markets, diversification and risk.

Curious about the investment products and services Community First Credit Union offers? Click here to learn more.

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. Community First Credit Union of Florida has contracted with CFS to make non deposit investment products and services available to credit union members. For specific tax advice, please consult a qualified tax professional.