What is active vs. passive investing? Active investing requires a buyer to make proactive efforts to make money, like consistently buying and selling or monitoring the market. Passive investing is also known as “buy-and-hold” investing; that is, relying on a long-term investment to make you money. The active investor can be thought of as a person going in and out of the market, depending on how the market is behaving. The passive investor may have chosen what is deemed to be reliable and will pay off in the long run.

Active investors appear to be careful but have a potential for being impulsive if something sounds like it’s a good idea. Passive investors rely more on empirical or historical evidence of the performance of an investment, or on the solid feasibility of a venture, where they are assured of a return on their investment.

There is a parallel in how people invest in everything else, like a relationship or a business. Come to think of it, relationships are sometimes thought of as businesses. People invest in each other because they are looking for some kind of return – financial, emotional, or physical. This has been the basis for marriages over centuries, especially those that were arranged, because the goal was always a merger of powers or financial gain. Not too far removed from how individuals act today (arranged or not). But of course, finances are not always at the forefront of relationships. Actually being in love or finding compatibility are factors too.

Just remember that what you invest in gets you what you think you want as a return. You may get lucky if happiness is a result or you may regret the option you’ve chosen (or discovered that you really didn’t want what you thought you did).