Lesson 1 of 5 · 4 min read
What is investing, really?
No jargon. Just: what are you actually doing when you invest?
You buy a piece of something
Investing is putting your money into something you think will be worth more later. That's vague, so concretely: you buy a small piece of a company. Not the whole company, which costs billions, but a tiny piece. If the company does better over the coming years, your piece is worth more. If it does worse, less. That's the whole idea. Everything else in this app is an explanation of that one sentence.
Saving and investing are not the same
In a savings account your amount stays put and a little interest is added. You know roughly what you'll get and you can't end up with less than you put in. With investing you don't know that: it can become more and it can become less. In exchange you get more on average over the long run, and that "on average" matters. It doesn't mean more every year. It means more across many years taken together.
Why people do it
Because money standing still slowly loses value. Groceries get a bit more expensive every year, so the same hundred buys slightly less next year than today. That process is called inflation. Saving often pays less than that rise in prices, so you go backwards in what you can afford while your balance stays the same. Investing is the attempt to keep up with that, and preferably to get past it.
In practice
At three percent inflation, a hundred is worth roughly seventy-four after ten years in terms of what it buys. The number in your account doesn't change; what you can do with it does.
Here it costs you nothing
You get ten thousand euros that don't exist. You can do everything with it you'd do for real: buy, sell, sell too early, buy too late. There's no bank account attached and there is nothing to lose but time. That's deliberate: making mistakes is the fastest way to learn this, and you'd rather do that with money that isn't yours.
Stocky says
You don't need to understand any of the buttons to start. If you see something you don't know, tap the lamp in the top corner of a lesson: the words from that lesson are explained there.
Remember this
- Investing is buying a small piece of a company and hoping it becomes worth more.
- Saving is certain but pays little; investing is uncertain but pays more on average.
- Inflation means money standing still buys less every year.
- Here you practise with money that doesn't exist, so mistakes cost nothing.
There is a quiz for this lesson
3 questions that check whether it stuck. They live in the app, because a quiz nobody grades teaches nothing.
Want to practise, not just read?
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