There are two basic categories of investments, either you

1) own your investment and benefit from the increase in the item's value

or

2) you lend your money for someone else to use, for which they promise to give you a specific return

Owning type of investments are typically stocks, real estate, commodities (precious metals, pork bellies) and collectibles.

Lending type of investments are typically bonds, CDs and savings accounts.

Which do you have?

__________________
"I've been rich and I've been poor but independently wealthy is where it is at."

both .. it works for both of us

We have a lot of (1) and a little of (2).

I guess ideally everyone should have some sort of mix of the two and I assume that the type of mix would depend at what stage in life you are at??

__________________
SAHM of 4

August food budget (groceries/take-out): $500.00/$75.00
Total spent: $238.97/$14.12

July budget/spent: $500.00/$650.00

Great post. I hadn't really thought of it that way. When I looked right now in our 401K (or as we affectionately call it in Canada our RRSP), we are about 75% own and 25% loan.

__________________

Both. We have a much bigger chunk of our money in the "own" category, though.

__________________
~Vicki~
Mama to Hailey, 4 and Ella, 2

Right. It should be a mix.

Funny, but loaning your money is considered a lower risk - in general.

__________________
"I've been rich and I've been poor but independently wealthy is where it is at."

We also have a mix of both. Unfortunately we own too much right now and it is not performing as well as the loan.

__________________
Grace

Wife to Stoney

Mommy of Sarah (8.5), Hannah (7), and John(5)