Over the next few months, we will talk about investing, starting from the basics and building up to where and how you can actually put money to work.
At its core, investing is simple—it is putting money into something today that you expect will be worth more in the future. That could be stocks, a home or part of a business. The goal is to grow your money over time.
Why invest instead of just saving?
Because life is short, but also very long.
We’re living longer than ever. That means more years to fund retirement, family, creativity and everything else we care about. Saving alone often isn’t enough. Investing helps your money grow faster and, just as importantly, helps protect it from inflation, the steady rise in the cost of living.
Think about two people: one who only saves $250 a month in an account earning two per cent, while the other invests $250 a month earning around seven per cent. After 25 years, the saver ends up with roughly $97,000, while the investor has about $204,000, a difference of over 100 per cent.
And there’s another issue: prices go up. Even at a modest two per cent per year, things get more expensive over time. In recent years, inflation has been even higher. If your money is only sitting in a savings account, it may actually lose purchasing power. You will need more money in the future just to afford the same things.
Of course, not all investments are equal. Some are solid, some are risky and some just don’t work out.
That’s why it helps to follow a few simple principles.
Principle 1: Good Investing Is Usually Boring and for the Long Term
Before investing, ask yourself: does this feel boring?
Good investing rarely feels exciting. It does not rely on hype, trends or fear of missing out. If something sounds too good to be true, it usually is.
It’s also important not to confuse investing with gambling.
Gambling depends on luck. Investing is usually tied to something real—like a company that earns money, generates cash flow and grows over time. There are no guarantees, but there is a foundation.
Principle 2: Don’t Put All Your Eggs in One Basket
First, a quick rant: I’ve seen a lot of advice online telling people—especially young people—to go all-in on one thing, like crypto. I have seen it play out in real life with friends who are hearing that advice too. The idea here being that young people are so behind that they need to take more risk and chase more outsized returns.
This goes against one of the most important ideas in investing: diversification.
Diversification means spreading your money across different investments—different industries, regions and asset types—like stocks, bonds, and maybe a small amount of crypto if you choose.
This matters because things change, often quickly.
During COVID-19, airline stocks dropped sharply as travel stopped. At the same time, many tech companies did well as people worked from home. Crypto has also had big swings in short periods, but it is an extremely volatile asset.
If all your money is in one place, you are exposed to that one outcome. If it goes wrong, you feel all of it. But if you spread your investments, losses in one area can be balanced by gains in another.
Principle 3: Think Long Term
The final principle is patience.
When people start investing, they often check their accounts constantly. They are up one day, down the next. This can lead to stress and worse, bad decisions like panic selling.
This is where the idea of a “paper loss” matters. If your investment drops but you have not sold it, the loss is not real yet. It only becomes real if you sell at that lower price.
Short-term ups and downs are normal. What matters is how your investments perform over years, not days.
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