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What is an Investment Vehicle?

Investing uses all kinds of strange and complicated words and phrases to describe perfectly simple things. One of these often used phrases is 'investment vehicle.' When I first heard this phrase, visions of Ferraris danced in my head. While it's true that some cars will increase in value after you buy them, that isn't quite what that phrase means in the investing world.

It's a strange phrase, but has a simple meaning...and we like when things are simple!

According to Investopedia, an investment vehicle is "in general, any method by which to invest." So why don't they call it an 'investment method?' The world may never know.

Basically, an investment vehicle is a place to put money. Examples are stocks, mutual funds, bonds, money markets, real estate, etc. An investment vehicle could even be a business of your own or a collectible such as jewelry or art. Remember it like this: an investment vehicle is a way to drive your money on to bigger and better things.

Investment vehicles are as diverse as motor vehicles. Some are flashy, risky, exciting, and even dangerous. Others are steady, safe, and will be sure to get you where you want to go. As in life, a Porsche (or a single hot stock) can really get your heart racing, but when you need to get the kids to soccer practice (or pay for their college), a minivan is more practical.

How you choose your investment vehicles is up to you. It depends on your situation, risk tolerance, amount of money, goals, and other factors. You can ask a professional advisor, or better yet, you can choose them yourself by learning about this fascinating and exciting subject. Of course, knowing what an investment vehicle is is a great place to start.

If you want to learn more about investing, but don't know where to start, join our SYSTEM. Phase 5 is all about investing, and will get your started with daily simple steps.

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1 comment:

The Dividend Guy said...

Love the format of the blog - well done.