Putting money in a savings account is one way to make it grow. Investing is another.
The main idea behind investing is to put money you’ve saved into things you think will go up in value over time. Things like stocks, or bonds, or real estate. The trick is to buy when the price is low, then try to sell when the price is high. That’s how you make a profit.
One big difference between saving and investing is that investing always involves risk. If the value of your investment goes up, you could earn more than you would in a savings account. But if the value goes down, you could lose some or even all of your money. That’s why you should never invest money that you can’t afford to lose.
And that’s why before you invest, we want to make sure you know the basics of what investing’s all about and how it works.
Note: Any time you sell an investment for a profit, your earnings are called capital gains. If you lose money when you sell your investment, you’ll have what’s called a capital loss.