A Series on Investments: Introduction


Christopher Yeghiayan

Economies, industries, and financial markets are all built upon the backs of investments. Investing, as it correlates to the financial world, is the action of setting money aside into varying assets, with the conception and hopes of growth. Whether it be placing left over cash into a brokerage account, or pouring millions of dollars into a high-profile, reputable investment advisor, anyone can begin investing at any level.

The fundamentals of investing may be simplified into a three step process. First, money is pooled from income, savings, or a range of other vesicles. This money is then put into a range of asset classes, determined by the investor or an advisor. The next step is to allow the investment to compound, and grow upon itself, garnering larger equities over time. The final step is to withdraw the investment, and reap the benefits of your contributions as you wish.

Investing, at its core, is a simple concept. However, as one becomes more knowledgeable over time, they may complicate their portfolio of investments to cater to their risk aversion, and reward desires. The fine line drawn between your governable risk and aspiring returns is known as your “risk exposure.” It is a fine-tuned profile that is perfectly catered to your financial situation, age, income, and a range of other factors. Understanding your risk exposure is vital to making safe, yet rewarding investments. You can begin to analyze your risk exposure by documenting your financials and demographics. Then correlating these to specific investments that suit your risk tolerance. The younger a person is, the more disposable income they have, and the greater desires for reward will all contribute to a higher risk exposure. The inverse will contribute to a safer level of risk.

The first step to financial prosperity through investments is to begin! While the process may seem daunting and overwhelming at first, there are several free online resources to aid in the process. Informative websites, such as Investopedia, and entertaining content creators, such as YouTuber, Humphrey Yang, are two prime examples of the vast quantity of free, reputable resources available to aid you in your introduction to investments.

As it applies to minors, it is important to understand the legal age to start a personal brokerage account is 18. However, there are opportunities to legally begin investing under your own alias, despite age. Online brokerages, like Charles Schwab and Acorns allow minors, and supervising adults, to open a “Custodial Account.” This is an investment portfolio instituted for the minor, that may grow at the discretion of the investments. Once the minor becomes 18, the assets are overturned to their name, and may be controlled as they wish.

Overall, the world of investments can be a lot to take in at first. Complex terminology, big numbers, and the fear of dealing with real money unfortunately drives many away. By taking the right steps, and understating your risk exposure in a safe environment, you can begin to educate yourself, friends, and families to pioneer your journey into this lucrative mad-house.



Featured Image – CNN Business (https://money.cnn.com/2018/05/17/pf/how-to-start-investing/index.html)