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What is Investment? The Goals, Benefits, and Types of Investments

What is an investment and give an example? What is called an investment? What are some examples of investments? All those questions are asked by most people because of their curiosity. Let's find out about the investment.

The first is the definition of investment. What is an investment? investment is the activity of managing the wealth we have, be it money or resources, where the goal is to get a profit from these activities.

Or another meaning of investment is a step or activity placing capital or wealth in the form of money or resources that we have in an Institution or company or object that has the potential for the future development of value. The whole point of investing is as a savior of the assets we have from the gist of inflation. By investing, we in addition to saving assets also get the opportunity to profit from what we invest.

A short investment is an investment within a certain period of time and can provide profit to investors.
Why do investments often refer to as investments or stocks? because it can generate profit or increase value in the future, so the investor can profit so that the media invested by the investor is often referred to as an investment.

Investment examples
Anthony bought gold in 2015 for $50 per gram. The gold is kept by the Anthony well crossed. After 5 years passed precisely 2020 the price of gold rose to $70 per gram. Knowing the price of mas went up, Anthony then sold his gold. Well, Anthony automatically earns a profit of $20 per gram. Anthony's actions in 2015 are called investments.

Other examples of investments can be stock investments, investments in deposits, investments in mutual funds, and so on.

Investment goals
As a rarity, investment has a purpose depending on who is making the investment. But in general, the investment aims to profit from the return of investing. I, for example, the investment objectives in the following points:
  • The first expected goal in investing is to make a profit or passive income. Get a profit beyond the value we invest.
  • The second goal in investing is to save the value of the assets we invest. Suppose we have a lot of unused money instead of staying in the bank money does not rotate then it should be used to buy gold which every year the selling price always increases. If the money is only kept in the bank then it will be vulnerable to value inflation.
  • The third goal of investing is to save, set aside, or prepare future funds. With us investing well we play an active role in developing our funds in the future. Our investment proceeds can be used to send children, in preparation for funds when we can no longer work.
  • The fourth investment goal is to accelerate our own economic growth. For example, Budi only works in a mediocre company. But beyond that Budi always invests in the form of buying gold and participating in investment programs such as deposits and mutual funds. So Budi in terms of his growth economy will be faster than his friend who does not invest.
Investment Benefits
  • The first benefit of making an investment is to increase the value of assets and wealth. By investing well, the more days will add value to the assets we have. Passive income investing is the best and easiest way to increase our wealth.
  • The second benefit of investing is independence in terms of finance. In other words, we are no longer dependent on debt because the money we have is enough to meet our daily needs.
  • The third benefit of investing is to be better prepared in preparing future funds. With us making investments, our needs in the future will be more assured. Or when we get fired from a company we're not confused because there's an investment. Even being fired can still earn money.
  • The fourth benefit of investing is opening up insights. Why open up insights? because with us making investments then automatically we will find various ways to be able to earn income in a smart way. Breaking the stigma that making money is only done through work.
  • The fifth benefit of investing is to add relationships. Why the relationship? by we make automatic investments our acquaintances become more and not only many acquaintances, they are also qualified in terms of financial ability, not closing the possibility we can be like those who have been successful in investing.
Types of investments
The types of investments that are well known in Indonesia are as follows
Judging by the time frame, investment is distinguished into two namely short-term investment and long-term investment.

Short-term investment
Short-term investment is an investment that can benefit or profit in less than 12 years. Investors who choose short-term investments are those who choose the rapid disbursement of assets in the event of something serious in financial terms.
In terms of benefits of course short-term investment has the benefit of saving funds temporarily but in addition to saving is also utilized for profit.

Types of short-term investments

Bank savings
Yes, bank savings are classified into short-term investments because they have the function to save money within a certain period of time. Easily dilute such as an emergency.

Certificate of Deposit
Certificate of deposit is a type of infestation of storing money in the bank with a certain period.savings can not be taken during the agreed time. Most deposits have a program that can be taken after saving 3 months to 12 months.

A bond is a bond in the form of an IOU containing an agreement between the debtee and the debtee, in that letter contains the agreement of the period of return and the amount of interest to be paid.

Long-term investment
what is a long-term investment? A long-term investment is an investment in which funds that have been invested in an asset will be rotated and can only be disbursed at least one year from the initial capital agreement.

Types of long-term investments

Property is one of the long-term investment instruments that will make you auto rich if you master the financial science about the property. Besides the value continues to increase every year, nor will it be snared by inflation.

Shares are letters or documents that are proof of ownership of the value of the company. Usually, entrepreneurs look for investors with stocks.

Insurance is an agreement between the two parties in which the one party is obliged to pay dues and the other party is obliged to bear or be responsible or provide guarantees for the safety or of the payer.

Well, so the understanding of the investment that I can give to friends all. Good luck yes. Also, check out our other articles who know it's needed. See you and have a good time.