Types of Investments

There are basically two types of Investments.

01) Active Investment – which requires Time & Money Both and

02) Passive Investment – which requires Money only.

The above are the 2 broad types of Investments.

Passive Investment is one in which only Money is required and not the time. Say for Example, Mutual Fund Investments, Gold Investments, Bonds & Fixed Deposit Investments and Portfolio Management and Wealth Management Services.

Here, the investor simply divert his money to some professional person (Such as Portfolio manager or a fund manager) and that professional person manages his money on behalf of that investor. Of course, it is associated with charges also. Most of the people around this world do the Passive Investment because of 2 reasons. One is because of the lack of the knowledge of Money & Investments and second is they are so rich that they simply don’t want to give their time behind managing money. They want to do many other things in their life other than managing money.

Active Investment is one in which Money & Time both are required. Here the Investors invest his time also in addition to money. Say for Example, Warren Buffet. Warren Buffet is the active investors because he invest both of his time and money while doing investing. Buffet do 60 hours a week of mind work. Before investing his money, he actively invest his time in analyzing various investment opportunities.

Which is Better? – Passive or Active Investment? ?

Well, nothing is good or bad. It actually depends on your own life style and Financial IQ. In terms of return, Active Investment can give you much more return than the Passive Investment because you are investing your own money & time both.

If you want to become an active Investor but don’t have a time or Financial knowledge to do so, You can’t become an Active investor. Of course, anyone can be an active investor if they invest their rime to learn the Investments.

People who are extremely rich in this world are active investors. They always do Active Investments. They invest their time and money both in doing active investments and that’s why they are ahead of the Passive Investors…!!!