Definition And Meaning of Investment

Author:

The part of the financial system where someone invests their money. This is an area in which they can make more money. This does not necessarily mean you should only invest your money in the bank. This is known as Investment.

This is why we purchase stock to make a profit. If we keep receiving the dividends, the money we used to purchase the stock will be called Investment.

INVESTMENTS AND ASSETS

The Investment column in our financial statements is where we find the investment. This is how we can say that Investment refers to our income-producing assets. Investing is an act. Buying something for future profits is called investing.

It’s a long-term process. Most of them don’t immediately benefit us. After investing, we must wait for the increase or profit from the invested funds.

If we have fixed deposits at the bank, we must wait until the lock-in period for fix deposits. Then we can get the benefits from the fixed deposit

RETURN ON INVESTMENT

ALSO READ  Erie Insurance review

It is a continuous process, which is used to make income or profit. The money that we have invested in it is called capital. The benefit or loss from that investment is called Return on Investment (ROI).

ROI = Return on Investment = Total Value of Investment

It’s not necessary that the return be always positive. ROI can sometimes be negative. It all depends on the value increase or decrease.

It is crucial to make sure your money goes in the right places. A scheme called the “quick rich” is designed to make quick money by deceitful and unqualified people. They take money from other people and make fake promises. Then, the money disappears from the markets. Avoid investing in such companies.