How to Save a Million Dollars (Maybe)

Investors put their money in a variety of places. Some investors purchase individual shares of stock or bonds. Some purchase bars of gold. But most investors purchase shares in mutual funds.

Mutual funds are like collections of trading cards. They own shares of a variety of different companies and are usually organized around a purpose. There are mutual funds made up of only the biggest companies in the United States or the smallest companies in the world. They might own stocks in only one industry like airlines or grocery stores. There are even mutual funds that own only gold company stocks. LIke a baseball card collection, these mutual own only baseball cards, but the cards are not all the same player.

Most mutual funds are not that specific. There like a card collection that has baseball, football and Pokemon cards all mixed together. These funds usually are tied to a stock market index. The Dow Jones, S & P 500, and Nasdaq are the three main indices in the United States.

As an investor you have to decided on how much risk you are willing to take. Investments in individual shares of stock are the most risky. Investments in indexed mutual funds are less risky. But all investments have some risk.