Investing 101

"For herein Fortune shows herself more kind than is her custom; it is still her use To let wretched man outlive his wealth To view with hollow eye and wrinkled brow An age of poverty."

In The Merchant of Venice, Shakespeare aptly described one reason we invest-so we don't outlive our wealth. (Note that a person who is 65 today is expected to live to 84, if male, and 88, if female.) Without an investment plan that's sensitive to both immediate and long-term goals, as well as to the level of risk to be taken to achieve those goals, personal investment success becomes difficult, if not impossible, to achieve.

Building wealth and protecting it from the effects of inflation and taxes are two major investment objectives common to almost every investor. Some are more successful than others in achieving these goals. If your wealth isn't growing because taxes and inflation are nibbling away at what you've accumulated, you need to re-examine the ways you save and invest.

In "Money Wise" (November 1995), we told you how to determine your level of risk tolerance. This month, we give you an overview of some of the many investment options that can help you reach your goals.

This article was originally published in the January 1996 print edition of Entrepreneur with the headline: Investing 101.