The world of investing is vast. There is an endless span of opportunities from virtually risk-free investments (such as bank savings accounts and personal CDs) to hyper-aggressive and somewhat speculative hedge funds and commodities. I personally did not choose a career that earns a high income bracket, so bank savings accounts and personal CDs are not for me. Likewise hedge funds and commodities are not only too expensive but are also too risky for me to invest in.
Real estate, on the other hand, makes sense to me. It accomplishes my objectives and I can afford to get in the game. As such, I can speak about the benefits of investing in property with confidence. Regardless, I believe that there are some underlying principals that are applicable to the entire universe of investing regardless of the specific techniques, asset classes, investment vehicles, and strategies. These principals need to be respected by anyone who aims to become an investor.
First of all, I define investing in the following way:
Investing is a long-term, actionable plan of asset acquisition and/or formation for the intended goal of financial gain, which is based on the skill set and knowledge base of the individual investor.
Robert Kiyosaki likens investing to travel, a comparison that I find quite compelling. Say you want to make a trip from New York to Los Angeles. You would have several options available to you for travel. Each would have their own pros and cons. If the cost of the trip is not an issue for you, but you need to get their quickly with maximum comfort, then you could consider chartering a jet. If, on the other hand, you are a budget-conscious traveler like yours truly, you could fly coach, which would be both less expensive and less comfortable, but would still get you to your destination within the allotted time. If working with a very limited budget, you could travel by bus. True, this would take much longer and would likely be very UN comfortable, but you would still eventually get to your destination which was the ultimate point, after all. But if your destination is one that requires you to cross an ocean, then your options just became fewer and likely more expensive whether you like it or not. Nothing that rolls on wheels will do.
So you see, you must first determine your needs, financial situation, and options before can you make the best decision relative to your travel plans. You may have to compromise. For example, flying is the preferred way to travel for many people, but you are not able to afford the ticket, you may have to resort to a less convenient option.