Some of the most common ways to invest is through the stock market, bond market, and real estate. ETFs, index funds, and mutual funds are different ways to invest into all three noted above, depending on the type of investment account one has.
Investing can be done through a wide varieties of ways from owning a buseinss to investing in one, also investing in private debt.
Stocks
A stock is a type of security, a share of equity of a company. Depending on the company they will have a certain amount of shares availiable to the public, this number can change.
Bonds
There two major types of bonds, goverment and corporate with ratings ranging from AAA to D. The highest rating is AAA and the lowest is D. A simple way to explain it is like a credit score, what is the chance one will receive their money.
Governement bonds are a debt obligation by a country. These are considered safer investments for most countries, becuase the chance a government fails to pay interest is pereceived as low.
Corporate bonds is a debt obligation by a company, the debt is normally used to buy stock or capital improvement.
ETF exchange-traded-fund
ETFs are a basket of securities and allows investors to become diversified within a category and/or multiple categories. Creating an easier way for self-investor to diversfy. Each etf has an expense ratio, which can range from 0.08% upto 1.5% and beyond. You can trade an etf like a stock, multiple times throughout the day.
Index Fund
Tracks a section of the market and invested passively. These normally try to match returns to a section of the market. There are fees, but most are considered on the lower end compared to mutual funds.
Mutual Fund
At closing, a person or coporation can purchase or sale a share of mutual fund after closing Mutual funds are traded once a day at closing. The fund is actively traded typically through buying and selling securities with their goal is to outperform a section of the market.
Real Estate
Breaksdown into three different categories including land, residential properties, commercial properties.
Land refers to property that can be zoned into residential, commercial, industrial, and agricultural.
Residential property has been zoned for living, single and multi-family homes, and apartment buildings.
Commerical properties has been zoned for commercial uses including malls, store, and restaurants are just a few.