What are the types of investments? A beginner's guide for newcomers who want to get rich through investing

Many people think thatwhat types of investments are thereare far away, but in fact, the investment options around us are very diverse. Whether you want to increase capital or protect your savings during difficult times, various assets are ready for you to explore. Today, we will explore each type to help you understand more deeply.

What types of investments are there?

In the world of finance,investmentis divided into various forms, including:

1. Stocks (Stocks)
2. Bonds (Bonds)
3. Mutual Funds (Mutual Funds)
4. Exchange-Traded Funds (ETFs)
5. Certificates of Deposit (CDs)
6. Retirement Plans (Retirement Plans)
7. Options (Options)
8. Annuities (Annuities)
9. Derivatives (Derivatives)
10. Commodities (Commodities)
11. Hybrid Investments (Hybrid Investments)

1. Stocks: How to make money by owning a company

Investing in stocks means buying shares from a listed company in the stock exchange. It carries high risk, but the potential returns are also high.

How you can generate income

There are two main approaches to stock trading:

Technical Analysis - Looking at price charts and pattern changes, making profits from “price differences” (Capital Gain) as the main strategy.

Example: Buy 100 shares of TSLA at 200 USD each (Cost 20,000 USD). When the price moves to 270 USD, you can make a profit of 70 USD per share = 7,000 USD total.

Fundamental Analysis - Choosing companies with bright futures and increasing profits over time. This type of investor spends time reading news, tracking earnings, and financial ratios.

###Steps for beginners

Learn first - Read books, articles, and study methods of stock analysis.

Create a plan - Decide which companies to invest in and the time frame.

Choose a broker - Open an account with a reputable securities company with reasonable fees.

Analyze - Use technical tools and fundamental analysis. Try a demo account before investing real money. Starting with a small capital is enough.

2. Bonds: Lending money to earn interest

Bonds are debt securities issued by governments, companies, or organizations. Bondholders receive fixed interest over a period.

How to generate income

Income comes from two parts:

1. Coupon - Paid according to the specified rate.
2. Price difference - If sold at a higher price than purchased.

Example: Invest 1,000 THB in a 5% bond for 3 years. You will receive interest, compounded interest, and principal back at maturity.

( Easy to start

• Study different types: long-term bonds, short-term bonds, government bonds, corporate bonds.
• Understand structure: interest rate, duration, payment methods.
• Choose appropriately: low-risk debt instruments offer lower interest but are more secure.

3. Mutual Funds: Let experts manage

Mutual funds pool money from many investors. The fund management company purchases various assets on your behalf. The benefits are that small amounts can invest, and returns are often higher than savings accounts.

) How to generate income

Various methods:

1. Use as a cash reserve account instead of a bank deposit.
2. Choose according to policies: domestic stocks, foreign stocks, bonds, gold, real estate.
3. Select funds that generate steady income ###Passive Income###.
4. Use tax benefits via SSF or RMF.

( Starting steps

• Understand different types: equity funds, bond funds, mixed funds.
• Set objectives: consider your investment goals.
• Open an account: at a trusted bank or management company.
• Monitor: check results and adjust your portfolio as needed.

4. ETFs: Funds traded like stocks

ETF )Exchange Traded Fund### is an index mutual fund traded on the stock exchange, with real-time prices, offering convenience.

( How to generate income

1. Profit from price differences - buy low, sell high.
2. Dividends - if investing in equity ETFs.

For example, investing in an ETF tracking the S&P 500 benefits from US market growth.

) Starting steps

• Choose an ETF aligned with your target: stock market, assets, gold.
• Open an account: with a trusted broker.
• Buy ETF: deposit funds and purchase at current exchange rates.
• Monitor regularly and adjust as needed.

5. Certificates of Deposit ###CDs###: Higher interest savings

CDs are special accounts offering higher interest than regular accounts, but funds are locked for a period.

( How to generate income

Fixed interest at the specified rate, higher than regular savings accounts.

) Starting steps

• Understand durations: from days to years ###commonly around 6 months###.
• Receive fixed returns: varies by bank.
• Make an agreement: between the bank and depositor.
• Receive income: often paid monthly or semi-annually.

6. Retirement Plans: Preparing for the future

Retirement Plans help you save money for post-retirement.

( How to calculate and generate income

Simple formula: Required amount = annual post-retirement expenses × expected years of life )about 70% of current expenses###

Example: Person A, age 35, wants to retire at 60, with a life expectancy of 20 more years. Current monthly expenses 30,000 THB, estimated post-retirement 21,000 THB/month (252,000/year). Need to prepare 252,000 × 20 = 5,040,000 THB.

( Starting steps

• Set goals: specify expected income and expenses after retirement.
• Create a budget: control expenses and check monthly savings.
• Plan investments: study suitable investment methods considering risk levels, including diversification.

7. Options )Options###: Rights for the future

Options are contracts giving the right to buy/sell assets in the future at a predetermined price.

( How to generate income

Call Options )Right to buy### - profit when prices rise. Put Options (Right to sell) - profit when prices fall.

Example: Expect SET50 Index to rise, open a Call Option position, profit from price increase.

( Starting steps

• Learn terminology: Call Option, Put Option, Expiration Date, Strike Price.
• Study how it works: read info and learn online.
• Open an account: with a broker offering options trading.

8. Annuities )Annuities###: Periodic payments

Annuities are payments made or received in equal installments over time, such as mortgage payments, car installments, or monthly savings.

( How to generate income

Calculate future value: knowing the cash flow, you can compute total amount in the future.

Example: Parent deposits 30,000 THB/year for education fund for a newborn, expecting 3% annual return over 17 years, how much will it be? )compound interest###.

( Starting steps

• Understand types: Fixed, Variable, Indexed Annuities.
• Study how they work: impacts on investment and savings.
• Choose type: based on financial goals and risk appetite.

9. Derivatives )Derivatives###: Contracts for the future

Derivatives are contracts giving rights to buy/sell underlying assets in the future, traded via TFEX.

( How to generate income

Can profit in both bullish and bearish markets, depending on your position.

• Call )Right to buy### - profit when prices go up.
• Put (Right to sell) - profit when prices go down.

( Starting steps

• Study basics: Options, Futures, Swaps.
• Learn types: for each derivative.
• Invest: start with demo accounts before real trading.

10. Commodities )Commodities###: Investing in valuable goods

Commodities include energy, metals, and agricultural products, valuable and widely used globally.

( How to generate income

Typically traded via spot markets and futures contracts.

Example: OPEC reduces oil production from 22 million barrels/day to 15 million barrels/day, supply decreases, demand increases, WTI price moves from 80 USD to 83 USD.

) Pros and cons

Advantages:

• Diversification: low correlation with stocks and bonds, helps hedge.
• Inflation hedge: when inflation rises, stocks and bonds may fall, commodities tend to benefit.

Disadvantages:

• High volatility: among the most volatile assets, about twice that of stocks.

Starting steps

• Understand pros and cons: study diversification and volatility.
• Find platforms: choose brokers offering commodity trading.
• Start trading: use risk management tools like Stop Loss and Trailing Stop.

11. Hybrid Investments: Multiple assets combined

Hybrid Investments involve investing in multiple assets simultaneously to reduce risk and increase income opportunities.

How to generate income

Invest in various assets such as stocks, bonds, real estate, cash, aligned with your investment goals.

Starting steps

• Set goals: short-term, medium-term, or long-term.
• Identify risk tolerance: understand acceptable risk levels.
• Manage portfolio: regularly review and adjust as needed.

Things to know before investing

Investing requires attention and caution. Here are key points to remember:

🔸 Set objectives: daily, monthly profits, retirement savings, or risk protection.

🔸 Understand risks: can you bear those risks? Know your expected returns.

🔸 Understand costs: include transaction fees and other expenses.

🔸 Study different types: stocks, bonds, ETFs, mutual funds, real estate, derivatives.

🔸 Create a financial plan: budget, control expenses, set savings goals.

🔸 Continuous learning: read books, articles, research reports, learn from experienced investors, follow financial news.

🔸 Manage risks: for high-risk investments, have a risk management plan.

🔸 Set timeframes: short, medium, or long-term.

🔸 Review and adjust: regularly check risk levels and performance.

🔸 Consult professionals: if unsure, seek financial advice.

Summary

What types of investments are there? If we study deeply, we see that the financial world offers many options for all levels of investors, whether experienced or beginners. The key is to choose based on understanding and balancing profit with risk.

The more you study and gain experience, the better you can plan and manage effectively, diversifying into various assets. Therefore, start with careful learning, create a clear plan, and proceed step by step with mindful investing.