Mutual Funds vs. Individual Stocks

There's money to be made.

I want to take a moment to discuss something that doesn’t come up often enough on World of Warcraft blogs and that’s the topic of finances.  The inherent truth of the matter is than when you are playing World of Warcraft, you are not working.  When you are not working, you are generally also not making money.

Investing changes all of that.

For those of you that are completely unfamiliar with the concept of investing, let me introduce it to you.  Imagine that Farendin has just started his reforging company in Orgrimmar, but it’s just getting off the ground.  He doesn’t have a whole lot of money and right now he can barely afford to pay Godan rent.

This is where you come in.

You give Farendin 1000 gold, chump change to a big baller like yourself, and Farendin agrees to give you a percentage of his profits.  All of a sudden, reforging is a huge hit and you’re rolling in the dough.  But there are drawbacks too.  If Farendin runs a shitty company because he sucks balls then your 1000 gold is going right down the drain.  You should have done some more research on his stupid concept of reforging before you just threw all that money at him.

Investing in real life works the exact same way.  But what exactly is the difference between an individual stock and a mutual fund?  Well, let’s say you’re too tired or stupid or lazy to actually do any research on reforging.  You can pay a company like Blackrock Financial Management to do all of the work for you.  They might also invest some of your money with Yelmak or Magar or Nogg but you can rest assured that they will always make a good decision and you will be making free money.

That’s how a mutual fund works, I think.  I’m not entirely sure but the bottom line is that with individual stocks you will sometimes lose money and with mutual funds you will never lose any money.  So go do some investing instead of wasting all that glorious potential!