Investment is time, energy, or matter spent in the hope of
future benefits actualized within a specified date or time frame. Investment
has different meanings in economics and finance. In economics, good investment is the accumulation of
newly produced physical entities, such as factories, machinery, houses, and
goods inventories. In finance, investment is putting money into an asset with
the expectation of capital appreciation, dividends, and/or interest earnings.
This may or may not be backed by research and analysis. Most or all forms of
investment involve some form of risk, such as investment in equities, property,
and even fixed interest securities which are subject, among other things, to
inflation risk. It is indispensable for project investors to identify and
manage the risks related to the investment.
.jpg)
How to invest money An increase in income encourages higher
investment, whereas a higher interest rate may discourage investment as it
becomes more costly to borrow money. Even if a firm chooses to use its own
funds in an investment, the interest rate represents an opportunity cost of
investing those funds rather than lending out that amount of money for
interest.Specific views, plans or ideas on ways to invest money effectively. Investment ideas typically involve the expertise
and advice of an investment advisor who recommends different investment tools
based on individual circumstances.One of the main factors determining what
investment idea a particular investor will employ depends on that person's
stage of life. Investors who are young can take on more risks, and an advisor
will likely recommend stocks or mutual funds to younger investors. Investors
who are approaching retirement, however, will most likely find it more
beneficial to take on lower-risk, short-term investments such as bonds and
T-bills. Another factor that affects investment ideas is the risk-return
tradeoff. Each investor has his or her own sensitivity to risk, which will
influence investment decisions.
Before going to any investment some investment ideas should
be generated. Those are :
• Before you
invest you need to understand what investment options you have.
• How long do
you want to invest money for ?
• Do you have
other investments ?
• What are the
values of your investments ?
• What’s your
risk profile ?
• How much
flexibility do you need?
• What are you
planning to use the money for?
• Promise
yourself that you'll keep your costs of investing (fees and commissions)
to less than 2% of the amount being invested.
• Be a good
middleman. Purchase exclusive items in high demand
• There's no
such thing as investing too much money, as long as your other financial
commitments are taken care of.
• Keep track of
your investments for tax purposes.
No comments:
Post a Comment