Excerpts from the Book - Preserving Wealth - written by Jack Lumsden, MBA, CFP®
Before you invest your money, you should understand what the actual investment is. The following passage describes the three basic investment classes.
Alice had listened politely but was clearly getting impatient. “So, Uncle Wayne, you know our situations. What should we invest in?”
“For starters,” replied Uncle Wayne, “let’s look at the three investment classes— cash, bonds, and equities/stocks—and review what you’d be getting into with each.”
“I’d like to take a stab at this,” declared Mark. “In the first two categories, cash and bonds, you’re basically lending money to another party, but with stocks, you’re buying shares, or ownership, in a company. Over the long term, stocks have outperformed the other types of investments.”
“Details!” demanded Sally. “More details, please.”
“Sure. In the category of cash, you’ve got savings and chequing accounts, and Treasury Bills (T-Bills). “T-Bills are sold every Tuesday by the Government of Canada, for terms from thirty days...