Investments
Investment is a way to grow your money by lending it to a business. As the business expands and earns more, your investment increases in value. Ideally, investments never lose money and consistently generate returns higher than the initial amount invested.
Historically, investing was a privilege reserved for the wealthy, requiring a broker to purchase company stocks on the stock exchange. Today, anyone can invest by buying stocks online through platforms like E*Trade or Robinhood, with most transactions being completely free.
A major advancement in recent years is the creation of Exchange-Traded Funds (ETFs). These funds combine many stocks into a single share, reducing the risk associated with individual companies failing. For example, a fund composed of the 500 largest companies tends to deliver average returns—typically a stable 9% over many years—offering a reliable way to build personal wealth.
Annuity
Annuity is an insurance product designed to distribute profits among many participants. Some receive more, others less, but everyone is protected. Due to historical reasons in the USA, annuities often face criticism from those unfamiliar with financial concepts. However, many recognize that Social Security is a form of annuity by definition, and it is likely the least efficient annuity since it is managed by the government.
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