Investment Capital is the money that you have set aside to invest.
How you decide to use this money is based on your investment capital, whether you want to make risky or safe investments, and how fast you want to grow your investment capital. However you choose to grow your investment capital, it is important to know what kind of risk you want to take and stay within your comfort zone.
Here are different ways of growing your capital and their associated risk.
1. Small Companies (risky)
2. Blue Chip Stocks (safe)
3. AAA-rated Bonds (safe)
4. In Options (High Risk)
You also want to know when you're going to see an income on your money. Someone who wants some paybacks twice a year should look at the dividend and interest-bearing investments.
1. Time until you see your capital payback with Small Companies (Only on the sale, most of the time)
2. Time until you see a return with Dividend paying Blue Chip Stocks (Semi-annually and on sale)
3. Time until you see a return with AAA-rated Bonds (Semi-annually)
4. Time until you see a return with In Options (Only on the Sale)