How do income, growth, and liquidity affect the choice of an investment?

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readerofbooks eNotes educator| Certified Educator

This is an important question, especially in view of the current economic climate. Here are a few basic points that you need to keep in mind. First, you need income to invest. People say you need to make money and that is generally correct. For instance, if you saw a great deal, but could not get into it, you cannot invest. So, it is important to keep money on hand. Second, you want to invest in things that will prove to provide good growth for the future. Finally, you need money that is liquid, that is, it must not be tied to other things. If you are not liquid, then you cannot move your money around to make the investments you desire. Finally, keep in mind that there are no sure deals.