What Makes a Good Investment?

Written by Charlotte Wood (last updated February 21, 2009)

Investing is often seen as an intimidating venture to those who are novices. There's so much strategy to be learned and field knowledge to be gained—how do you do it? For someone who only knows the financial basics, investing is especially overwhelming. You may not know the first thing about what makes a good investment and what to look for when dealing with investing your money. Fortunately, it's not that difficult if you just focus on the basics. If you can start with the basics then you can get going on your investment adventures!

The most basic rule to follow when making an investment is that a good investment makes you more money than you had when you started and doesn't take up more time than you're willing to put into the endeavor. Even though the initial "diving in" is intimidating, if you can use this one rule as your guidepost then you should be able to stay out of any significant problems.

Be careful though and don't fall for schemes and get-rich-quick plans—that's a surefire way to land yourself in financial straits. The best way to make a good investment is to do research and start out small. Once you get some experience under your belt then you can take bigger risks and find better high-risk investments.

It is a good rule of thumb to seek the advice of others more experienced when you're first beginning your investment career. If you can talk to brokers, investor friends, and anyone else who could know what they're talking about you can get good personal advice and clarify things that may be a bit unclear.

A good investment doesn't have to be risky or long term or greatly lucrative—it just has to yield more money than what you started with. That could be anything and leaves the door wide open for any number of investments.

When you start, start small and grow from there. Baby steps are the best ways to make sure you make good investments. If you can start off making good small investments then you can graduate your way up to making good large investments. And this all ends in good dividends!

Author Bio

Charlotte Wood


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