What is investment?


One reason many people fail, even very sad, in the investment game is that they play it without understanding the rules that regulate it. This is a clear truth that you cannot win the game if you break the rules. However, you must know the rules before you will be able to avoid breaking them. Another reason people fail to invest is they play the game without understanding what it is. This is why it is important to open the guise of the meaning of the term, ‘investment’. What is investment? Investment is a valuable income income. It is important for you to record each word in definition because they are important in understanding the real meaning of investment.

From the above definition, there are two main features of investment. Every ownership, property or property (from you) must meet the two conditions before they can be eligible to become (or called) investment. If not, it will be something other than investment. The first feature of investment is that it is valuable – something very useful or important. Therefore, every ownership, property or property (yours) that has no value, and cannot, investment. With this standard definition, self-estimated ownership, useless or insignificant, property or property is not an investment. Each investment has a value that can be monetaryly quantified. In other words, every investment has a monetary value.

The second feature of investment is that, besides being valuable, must generate income. This means that it must be able to make money for the owner, or at least, help the owner in the process of making money. Every investment has capacity, liability, responsibility and function that creates wealth. This is an investment feature that cannot be revoked. Every ownership, property or property cannot generate income for the owner, or at least help the owner in generating income, not, and cannot, investment, regardless of how valuable or valuable maybe. In addition, there are those who cannot play this financial role not investment, regardless of how expensive or expensive.

There are other features of investment that are very closely related to the second feature described above that you must pay attention to. It will also help you realize if the valuable is investment or not. Investments that do not make money in a strict sense, or help generate income, save money. Such investment saves the owner of some expenses he will do in his absence, although it may not have the capacity to withdraw money into investor pockets. Thus, investment produces money for the owner, although not in a strict sense. In other words, investment still performs the function of creation of wealth for owners / investors.

As a rule, every valuable, besides being something very useful and important, must have the capacity to generate revenue for the owner, or save money for it, before it can be eligible to be called an investment. It is very important to emphasize the second feature of investment (I.e. investment as a generator of income). The reason for this claim is that most people only consider the first feature in their assessment of what is an investment. They understand investment only as valuable, even if valuable is income-devouring. Such misunderstandings usually have serious long-term financial consequences. Such people often make expensive financial mistakes that cost wealth in life.

Maybe, one of the causes of this misunderstanding is that it can be accepted in the academic world. In financial studies in conventional education institutions and academic publications, investment – otherwise called assets – see valuables or property. This is why business organizations consider all their valuables and property as their assets,

Comments are closed.