Could you please explain in a few words what an investment is and how it works. Really need to know about it. Will be greatly appreciated for any answers.
JESS
Comments
I would say an investment is anything you do(specially involving money) with the intent of receiving more later on.
In its broadest terms, an “investment” is deferring your current purchasing power to future use.
Investment = The creation of more money through the use of capital.
Worded another way - Investment is the purchase of ASSETS that you expect bring you a return that is greater than the purchase price of those assets.
It could be a Stock that you expect to increase in value or that brings you a dividend.
It could be a bond that pays a fixed interest rate.
It could be realestate that you expect to increase in value or that you rent for a steady return.
It could even be a piece of equipment that will not go up in value but its use allows you to make product that brings you a return in terms of sales.
These are all investments. You are using money to make more money!
There are many types of investment like risk less investment and risk investment. If you are going to invest in risk less investment rate of return is comparatively low,otherwise the rate of return is high.
