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The Importance Of Money In The 1920's

1353 Words6 Pages

Money is a beautiful thing; it can be the thing that allows you to thrive in life. Money is also a dangerous thing; it can be the thing to put you in debt and owning absolutely nothing. In the 1920’s, the only important thing was money and investing in the stock market to succeed. People would trust stock brokers to invest their money in the stock of a company that was thriving. When millions of people do this, the stock market can experience an extraordinary rise in success, but also a drastic pitfall leaving millions out of work and without money. The great depression was brought about by consumers buying on credit. Credit cards did not exist, but potential dollars did. Potential dollars is money that a person could receive from cashing …show more content…

The first being return on investment, meaning what type of return are they looking for. For example, are they looking to double their money in two years, or are they looking for a steady income over 5 years. The second evaluation being short and long term investment. Short term would be a person who wants to get in, make money, and get out fast. This symbolizes the infamous get rich quick mentality commonly attributed with the investor lifestyle. Short term has much more risk because the person is relying on a quick and impactful return when if they didn’t get that, the investor loses money. It also requires the investor to monitor one’s stocks more actively. When a person is looking for a long term investment they are interested in continued growth over a longer timespan and a consistent growth from their starting point. If a person is looking for a long term investment, they do not have to monitor the day to day activity of the company but must look periodically to make sure it’s consistent and doing what they …show more content…

Risk is putting trust and confidence in a company that they will grow and do what they promise. As an investor you need to be a student of the company while understanding factors that may impact the ability or inability to deliver the return that is expected. “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years”, says the successful Warren Buffet when explaining which type of investing he prefers(Buffet). For example, an investor would not want to buy stock from an orange company when a hurricane just destroyed every orange farm in Florida. It is necessary to know what your getting yourself into. One must not ask themselves, “Will this stock succeed?” but ask themselves “Would I buy their product?” when determining weather to invest in a company or not. The economy’s success is a direct result of the stock market succeeding. When there are thousands of companies selling thousands of products, and there are millions of investors that believe in those products, they will invest in such companies because they believe the company will succeed. This comes as a result of the successful product. Investors are also the consumers of America. As stated before, investors buy stock from companies that sell products that they would buy; well they do buy those very

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