How Does Investments Help A Person In Securing His Money?

This question has concentrated on money markets because they are central to understanding the functioning of the macro economy. But financial markets come much closer to home when we borrow for a mortgage, invest for our children's education or our own retirement, and set aside funds for a rainy year. Here are the major kinds of investments:

1. Money, which is a medium of exchange for all goods and services.
2. Savings accounts are deposits with banks, usually guaranteed by governments, that have a fixed dollar principal value and interest rates determined by short term market interest rates.
3. Government securities are bills and bonds of the federal, state, and local governments. They guarantee repayment of principal on maturity and pay interest along the way.

4. Equities are ownership rights to companies. They yield dividends, which are payments drawn from the companies net profits.
5. Pension funds represent ownership in the assets that are held by companies or pension plans.
Note that these financial assets exclude the single most important assets owned by most people, their houses.