Understanding of investment
Investment is placing a certain amount of money, capital or funds in the hope of obtaining additional or benefits from developing the value of the money. In Investing applies the law that the higher the return offered, the higher the risk that must be borne by the investor.
In the financial world, investors are representatives to mention individuals or institutions (both domestic or non-domestic) that make an investment or form of investment in accordance with the type of investment they choose, either in the short or long term.
So simply we can conclude if the investor is a term for people or institutions that make investments.
Return and Investment Risks
The thing that needs to be noted is “Investment always has two sides, namely return and risk”.
Returns or profits are:
When the investments we make experience an increase in value, profits then the money we invest will also increase.
While the risks are:
When the investment that we do experiences anxiety, then the risk of failure is also borne by the investor (investor).
Benefits of investing
1. Long-term income potential
2. Pasive income (blocking income that continues to increase by itself)
3. Investment money is designed to move, develop and increase in value
4. The value of money can always adjust to its value on the market (does not decrease)
Risk of investing
1. Possible to experience a decrease in number
2. likely to experience losses
3. It takes a long time to be able to make a profit
4. The less amount of money invested the lower the profit gained
Various types of investments
1. precious metal
Precious metals such as Gold are the most accepted valuables in the world after foreign currency. The price of gold will follow the increase in the currency values of the G-7 countries (namely America, Japan, Germany, England, Italy, Canada and France). The higher the increase in the value of foreign currency, the higher the price of gold. Besides that, the price of gold is usually also proportional to inflation. The higher the inflation, the higher the price of gold will usually be. Often the increase in gold prices exceeds the increase in inflation itself.
Investment in property means investment in the form of land or house. The benefits that can be gained from the property are, renting out the property to another party so that they get rent or sell the property at a higher price.
Examples in daily life:
Company A wants to open a housing business, then you invest your money (investing) about 10 percent of the capital needed for the cost of making the housing company, that means you have the rights / shares of about 10 percent of the company. When the business experiences an increase after the housing, then you will benefit from the 10 percent of capital that you have invested. Your money will increase automatically, which is called return.
Likewise vice versa if the housing turns out to … Read More