Investments In Simple Words
My site is devoted to the most efficient types of investments. To this day I’m on the topic of investments made more than 70 reviews and articles. However, a simple, short definition of “investment” I have not brought. Today, it is time to close this gap. So let’s see what still does the term investment.
I have to say – this publication will not be detailed and tedious article with the theory and detailed classification. This short article. But it you two minutes understand the essence of the essence of all investments in the simple examples in my interpretation.
The essence of the concept of investment in simple terms
Investments in simple words – it is a waste of money on something to increase their numbers over time. It’s simple. Very similar to the … … emmmm agriculture. In the spring planted a potato, and in the fall dug five.
Why invest? Returning again to the comparison with the potatoes. What are some options for using it:
- If you store just – it deteriorate. And money – they spoil each code, each month. This is due to the effect of inflation;
- If cook and eat – it certainly will benefit, but also lost. So it is with money. Of course the money we earn, and their spending (“have potatoes”).
It turns out that investment – is a strategic move. Their task – to provide additional income. Kinda – temporary sacrifice for the good.
The logic of investments
and again come back to the potatoes. How to get the harvest? It is necessary to put it in fertile soil, fertilize and protect from weeds, watering, to guard against pests, and in the autumn – to dig out (that’s what I remember from my childhood that process). All hair’s breadth as to it is necessary
- investments: to choose an effective investment object (“fertile land”),
- it is necessary to control the attachment (“fertilize,to water”);
- it is necessary to limit the risks (“guardagainst pests”).
And it is important to establish and maintain terms of investment (“dig”). Depending on the duration of the investment even be divided into short-term (<years), medium term (1-3 years) and long term (> 3 years).
In this case, investors may be two main objectives. With the main objective is clear. It is – to provide additional income. The second goal – to influence the way this income is generated. For example, investing a significant amount of the company’s shares can receive a blocking or controlling stake, and make decisions about the fate of this company.
I would appreciate your opinion on the topic. Also – feel free to writeasked in commentsquestions.
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I wish you all a profitable investment!