If you have been cluelessly dancing around the internet in hopes of the correct answer to “Which of the following statements about investing is false?” you have landed at the right place.
You are most probably drained and tired looking for an answer, so let me do the honors and take away the pressure off your mind and give you the right, or more specifically, the false answer in this case.
“Which of the following statements about investing is false?
A) Investing is riskier than putting money in a savings account
B) On average, investing money in the stock market earns a higher return than putting money in a savings account.
C) Investing is a guaranteed way to grow your money.
D) Investing is best for long-term financial goals, like paying for retirement. “
The answer here is option (C). Investing is a guaranteed way to grow your money.
You may now be wondering what might be the reason behind the selected answer. Well, worry not, as I have got you covered on that as well.
Stay with me till the end to know more about the truths and myths about investing, and you can accordingly make a choice for yourself!
Key Points To Remember
- Investing doesn’t necessarily mean stock investments. You may as well invest in mutual funds or real estate properties.
- Investment is no child’s play. It requires thorough research and proper guidance. A lack of either of these will land you in serious financial trouble.
- Investments usually serve you with monetary benefits in the long run, such as investments. For short-term profits, you have your good old high-yielding savings account.
- Investments must never be considered risk-free. Market fluctuations and price fluctuations are common risks that investors come across quite often.
Investing Is A Guaranteed Way To Grow Your Money
“Investing is a way of putting money into an endeavor with the hope of making a profit. Although investing can be profitable, it is not a sure thing, and there is always a risk of losing money.”
For instance, if I am buying 100 shares of Tesla for $500 each, that would cost me a total of $500,000. This is a big investment considering the amount that I have spent.
While investing, I may have expected a visible profit; however, if Tesla’s share prices fall due to market fluctuations, so will the yield that I had expected from my investment, so much so that I may end up losing money instead of making a profit.
So, no one can ever guarantee that the money will only come if you start investing.
“Investments can go up and down, and there is no guarantee of a positive return. In fact, some investments, such as stocks and mutual funds, can be particularly volatile and subject to sudden and unexpected fluctuations in value.”
The stock market is one of the riskiest places to invest your money. One day you will be drowning in millions, and in a flick of a second, you may just lose it all.
And this is not a metaphor. I mean every word of it. This is exactly how risky the stock market is. I am not scaring you. I am just letting you know that you must not put all your faith in the stock market when it comes to investing all your hard-earned money.
“Investing is an essential tool for building wealth over time, but it is important to approach it with a realistic understanding of the risks involved. Diversification, careful research, and a long-term perspective can help investors manage risk and increase their chances of success.”
How To Deal With The Market Risks Like A Pro?
Despite all the risks involved, investing is one of the most interesting ways to grow your money. Had it been that bad, Wall Street would have been barren by now, and companies would never let their stocks go public.
Yes, investing will never guarantee to grow your money consistently; however, there are a couple of ways by which you can dodge the risks like a pro.
So, let’s go through those ways, shall we?
Diversification is one of the most clever ways to spend your money without having to incur huge losses. What diversification means is to invest your money in a diversified area rather than just focusing on one.
As I have mentioned before, the stock market is not the only place where you can invest your money. You have mutual funds and real estate available to you. In fact, you may also invest in vintage artifacts, paintings, and even gold.
This way, your money will be spread in different areas, and your chance to go through a huge loss in case the market leans towards a bear will be lessened notably.
Investment is not a child’s play. You cannot just decide to invest today and start investing tomorrow. That is not how it works, and the earlier you understand, the better.
There are multiple shares available, each of which has a different purpose and yield. There are also certain shares that consistently incur losses and are not worthy enough to be invested in.
But how will you know it?
This is where research and studying come to the rescue. If you plan on investing, make sure you study the market and do a thorough research of its operations. Take help from experts and always seek guidance unless you become experienced enough to make decisions for yourself.
Keep A Long Term Perspective
Investments are not made to fetch short-term results. People invest in hopes of growing their money by a certain margin at the time of withdrawal, which supposedly is five years or more.
Invested money can never grow properly in a short time amid market fluctuations and risks.
If you want to grow your money for your wedding or a vacation, it is always wise to put it in a high-yielding savings account. This way, the money would remain free of any risks and grow safely with the added benefits of interest rates.
However, if you are planning for your life after retirement, where you would not have to worry about giving up on the lavish life that you are living now, investment is your pal.
How To Earn Money Online Other Than Investing?
Everyone here is looking forward to growing money. One of the biggest misconceptions that one has about growing it is investing in stocks or shares. But you know that it is not the best option. In fact, it is one of the riskiest options that you may want to participate in.
Also, investing is not the best option when it comes to short-term profits. They have the capability to fetch your money, but only in the long term. Market volatility makes investment not much of a preferable option. So, if you are here to grow your money, there are a couple more options that are actually effective both in the short term and long term.
This is one of the best, and yet the most popular options available if you wish to grow your money anytime soon. Freelancing gives you the opportunity to explore your skills and get paid for it. You can get associated with any profession that interests you and get a good amount for it. This does not need to be a permanent job. It is a great side hustle option to grow your money if you are in college or planning for a side hustle.
Developing And Selling Digital Products
In this world of digitization, there is nothing more popular and in-demand than digital products. Music, videos, games, ebooks, etc., are some of the best options that you can give a try. You can take time out to develop a product that is out of your passion, skills, and expertise and sell it for a good price if you can satisfy the demands of the clients.
Online Tasks And Surveys
This is yet another way of earning money online without having to invest in stocks or bonds. Here, you can participate in certain tests or surveys that are conducted online and get cash or rewards in exchange for it. This is a simple and yet interesting process to earn money.
It is a crime if we are talking about earning money online and not talking about blogging. It is one of the best ways to earn money if you are passionate about something. From food blogging to travel blogging to technical blogging, the options are numerous. All you have to do is pick a niche that you have expertise in and start writing. Once you are able to build a community, you can easily make money from it.
The Bottom Line
Hopefully, by now, I have efficiently explained to you “which of the following statements about investing is false.”
Investing is one good way to grow your money; however, you must not fully rely on it. Investments come with risks, which can be avoided with proper research and mindfulness.
Thank you for staying with me for this long. I have added everything that I could; if you still want to add anything more, you are welcome to drop a comment below.