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Lewis Schiff

Investing is a smart
way to make your
savings grow

People can invest in their own business, such as a contract cleaning or a car service. If the business does well, the value of the person’s original investment goes up. But individuals can also invest in other people’s businesses. They can do this through the stock market. That is how many millionaires have made their fortunes.

People who invest in the stock market buy stocks and shares entitling them to ownership of a small part of the company they have chosen to invest in. If the value of the shares goes up, the people who own those shares make money. Millions of people are investing in stocks and shares in the USA, UK, Europe and Asia.

Professional investors can show that the stock market seems to go up most of the time. That does not mean that the stock market will not go down next year. The shares people buy today may be worth less tomorrow.

It is possible for people who do not have a lot of money to invest a small amount in the stock market each month. In fact, this can prove a reasonable way to invest. The value of the shares can grow over time.

Look at the following example: If Monica and Roberto invest $100 a month every month for 40 years, they will invest a total of $48,000. If they put the money in a fund invested in the stock market, there is a good chance, based on historical performance, that they will receive an 8% return or interest on their annual investment. At the end of 40 years, their outlay of $48,000 will - on this growth model - reach an accumulated total value of $351,428 assuming all profits are reinvested in the fund.

People invest in the stock market through stock broker firms or financial management companies, such as Charles Schwab and Merrill Lynch. It is easy in most countries to buy shares of companies on the stock market over the phone or on the World Wide Web through financial management companies like these.

These companies can advise small investors on how to put their money to work. They may suggest that the investor buys stocks. They may suggest mutual funds. Mutual funds are great for small investors because the individual’s money is managed by professionals who have detailed knowledge of the stock market and how companies are performing at any given time.

There is one lesson about investing that everyone must understand. Everyone invests at their own risk. If someone invests in companies that do not go up in value, they can lose some or all of their invested money. Each person is sole responsible for his or her own investment choices. If a person invests well, their investments will go up more often than they go down.

However, do remember to get independent advice before making any serious investment decisions.

Source: New English Digest


invest: make an investment (invertir)
does well: becomes profitable (rinde, anda bien)
goes up: rises (sube, incrementa su valor)
stockmarket: stock exchange, an exchange where security trading is conducted by professional stockbrokers (bolsa de valores)
stocks: stock certificates (valores)
shares: portions into which the capital stock of a corporation is divided (acciones)
entitling them to ownership: giving them the right to possess (otorgándoles derecho de propiedad)
investors: capitalists, people who commit capital in order to gain financial returns (inversores, capitalistas)
go down: fall (depreciarse, disminuir su valor)
be worth less: become less valuable (valer menos)
reasonable way to: sensible method to (método razonable de)
over time: as time goes by (con el paso del tiempo)
outlay: disbursement (desembolso, salida de dinero)

growth model: example of financial growth (ejemplo o modelo de crecimiento)
all profits
: all profitable earnings (que todas las ganancias)
over the phone: by telephoning (por teléfono)
like these: similar to these (como éstas)
advise: give advice to (aconsejar a los)
on how: about how (sobre cómo)
mutual funds: regulated investments with a pool of assets that regularly sells and redeems its shares (fondos comunes de inversión)
managed: administrated (administrado)
performing: acting, going on (desempeñándose)
at their own risk: risking themselves (a riesgo propio)
is sole responsible for: has the exclusive responsibility for (único responsable de)
choices: alternatives chosen (elecciones, alternativas escogidas)
independent advice: professional advice (asesoría privada)