Investing is a tough subject to navigate because there are no certainties with investments. You could easily put every penny you have into an investment and lose it all instantly, so you should be careful about what to invest in. Although I can’t give investment advice, I would like to lay out the facts about the differences between various investments, including their risks.

Real Estate

Real estate is one of the safest things to invest in, as long as you can afford it long-term. You may buy several properties with the hopes of renting them out, only to find that nobody in your area is looking to rent. Or, you may find damage to your property that could cost thousands of dollars to repair. Buying real estate is a hard asset, though, so you are extremely unlikely to lose everything unless your property gets foreclosed.

Stocks

Stocks are risky because you can never predict what a company will do in the future. For example, a new product could tank, or there could be a scandal against the CEO. Sometimes, stocks drop just because an “expert” decides it’s time to sell. Still, many people make a living from trading stocks, so keep in mind that great risk can lead to great rewards.

Mutual Funds

Mutual funds are like stocks, except you only put pennies into each. A mutual fund can tank, but it is highly unlikely that you will lose all of your money right away. Likewise, you are unlikely to gain money rapidly.

Businesses

Investing in a startup is fun and exciting, but like the stock market, it is incredibly risky. Most companies do not make it long-term, so you should be absolutely sure of success before diving in. Or, you should at least be comfortable with high risk.

Cryptocurrency

Cryptocurrencies are the new stock market in many ways. They are extremely volatile, as evidenced by Bitcoin’s rise and fall. While you may be safer with lower-priced altcoins, there is no guarantee, so be careful with your investments and watch prices constantly to ensure you don’t lose everything you have.

Overall, investments are risky and can lead to devastating consequences if you are not careful. Do your research on any investment vehicle you are considering, including historical data and future projections. And keep in mind that even Warren Buffett loses investments, so if it can happen to him, it can certainly happen to you.