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We are going to start a series that will cover some basics of investing. It is our hope this series will help you be better prepared to have informed conversations with professionals as well as family when the topic of investments comes up.
Let’s start with the reason you invest. In general, people invest with the intent to grow the funds for future use. At a minimum, invested dollars should appreciate more than the rate of inflation. It is important to know WHY you are investing as well as your TIMELINE for investing. Among other factors, these will help determine your investment strategy.
If you are not familiar with assets and liabilities, let’s define them as well. Simply, assets generate money, and liabilities use money. You want to increase assets and reduce liabilities so you have resources in the future to meet your planning needs.
These terms may seem basic, but having solid definitions in mind when you discuss investing leads to more productive conversations.
