What is an investment?
In the life of every person, regardless of his talents and qualities, there may come a stage when he wishes to get rid of the daily routine of an accountable worker. This is especially true of those whose leadership is behaving despoticly, not allowing them to act freely and creatively. To gain independence, even if you do not have any funds and assets in free access, investments can help you.
What is investment - definition
If you take it literally, investing means “giving away money today in order to get more money in the future.” An investor is a person or any organization investing.
Investing - placing personal funds in various types of values, both material and informational, as well as elements of economic sectors, enterprises, financial markets and so on, with the intention of increasing this capital.
What is related to investments
- "Real" or "Tangible" - funds, land, fixed assets and other tangible assets invested in the enterprise.
- Financial assets - securities, shares and other legal forms fixed by law.
What is an investment? First of all, contributions to mutual investment funds, trust management of funds, deposits in real estate, as well as independent manipulation of securities and currencies.
When investing, one should take into account and maximize the gain in three main parameters:
- The term of capital investment.
- The percentage of capital growth.
- Volume and Regularity of capital investments.
Investments are divided into short-term and long-term. Short-term for the most part - speculation, generating income throughout the year. In other cases, investing involves long-term return on profit over several years. Naturally, this area is more risky than credit.
To minimize risk, make sure that the object of your contribution has:
- Plan of activity and calculation of the estimated financial returns.
- It has a good reputation. Investing in a shadow business, you risk losing profits, and even be in the red.
- Transparency of reporting and working with the media are also important when choosing an object.
- Pay attention to the internal policy of the state in which the potential investee operates.
What do investments give?
Perhaps the main goal of investment is independence from anyone else, including the heads. Independence is material, opening up the creative scope for business expression.
In general, the main characteristic of investments is the ratio of risk to profit. This type of activity is interesting because, in most cases, you are exerting a minimum of creative power and organizational work in the work of your salary object.
It should be noted that with the increase in the duration of the time period of return decreases the riskiness of the transaction. Therefore, speculative markets are rightly considered to be the most risky deposit options, although, of course, if successful, a significant gain in time and in return is obtained.