What Is Investing?

What is investing? The word investing has many meanings, but today we are going to talk about investing as making money with money.

Definition of investing is:

What Is Investing

Benjamin Graham’s definition of investing is “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.”

For some reasons some people think that it’s okay to lose money with their investments. There are people who think that we have to take risks, etc…

..if I hear someone speaking like that I know that they are small investors. Because the only reason they can afford to lose their investment is that it wasn’t big in the first place. But lose $1 billion and try to make that back.. not so simple anymore.

Warren Buffet has a rule ==> “DON’T LOSE THE MONEY”

A lot of people who think that they are investing are actually just speculating. At least that is my takeaway from Graham’s book ==> “The Intelligent Investor

Speculating is where you have to take risks. Investing is handling money with certain rules.

Graham’s 3 Elements of investing:

  • you must thoroughly analyze a company, and the soundness of its underlying businesses, before you buy its stock
  • you must protect yourself against serious losses
  • you must expect enough, but bot extraordinary performance
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