If you want to make money in the long term, you will need to start investing. You can invest in a retirement savings product, CDs, real estate, mutual funds, stocks, bonds, and other products. All investments work in a similar way: you spend your money and in exchange for offering value to someone, you earn money (called interest or a return) on your investment. For example, when you buy a stock, you are essentially paying for a small part of a company. That company will use the money you have paid to run and expand the business. As the business grows and becomes more valuable (with the help of your investment money), the stock may increase in value and you will be able to earn a profit because you helped the company.

Most investments come with risk. That is, there is no guarantee that you will earn money and you may even end up losing the money you invested. If you buy stock in a company and the company goes bankrupt, for example, you may lose the money you have invested. Generally, the higher the risk, the higher the possible returns on your investment. The riskier the investment, in other words, the more money you stand to make. The safer the investment, the lower the return or percentage of interest.

It is always important to consider carefully before you invest. If you invest too much and end up losing your money, you could find yourself unable to pay your mortgage, your personal loans, your unsecured debts, and other obligations.