Basics Of Investing

Investment is often defined as a tool for placing of money or capital and interest by way of buying property, stocks, bonds and other investments, but in General can be interpreted as taking/leveraging time, money or effort for the sake of advantage/benefit in the future. So basically investing is buying something that was expected but it can be re-sold in the future value of a higher price. (land, houses, gold, cars, etc.)

Why we need to invest? There are many reasons for this, one of which is the preparation of the future through the preparation of planning needs with customized financial capability at this time. As we know with time in currency values can be reduced due to inflation, that is, for example, the increase in prices of goods and services, inflation, this is one of the main reasons why we need to invest, both over the funds or assets that already exist or will we have to let the price or value of his can be maintained and of course the expected increase.

Below the main reasons to invest:

The existence of inflationary factors yg occur almost every year, and in any country.

The existence of future needs or the needs of the moment that has yet to be fulfilled

The need to protect the value of the asset has been owned

The existence of a desire to increase the value of existing assets.

Investment Risks

Lately a lot of people doing a good investment, investment land, houses, stocks, bonds, gold, etc., but they have definitely had their risk factors. Well yg small, moderate, or high. Where the circumstances in the future also is uncertain and cannot be predicted accurately. Investment results obtained may not correspond to the expectations, could even be opposite and yield losses, in the context of this is the investment into a part of life, intentionally or not always invest, learn, work and do business.

Types of Investment

Savings and deposits

Have savings in the banks is how to invest the most simple and easy, supported with liquidity and make it easier for us to take at any time, the bank also is relatively very safe, because up to now the deposits in banks are guaranteed by the Government. The Bank also gives big flowers, flowers depending on the type of deposits with the principle gets larger and older people keep the funds in the bank. Savings deposits are similar to its own but with a certain period, the interest rate on offer at relatively higher deposit than savings interest. This type of investment deposit belongs to the small risk.

Bonds

The bond is a type of IOU with a specific time period. Bonds can be issued by the company, the Government or other institutions. The rewards of bonds are a staple of investment capital plus interest coupons, coupon interest of this magnitude has already determined the percent and generally higher than bank interest rates or other securities that are considered safe, given the risk of the bonds is relatively higher. Payment of coupon interest is performed periodically, for example, 3 months or 6 months or yearly. Payment of principal investment itself is done when the bond matures, i.e. the date on which the bond expires.

Stock

The stock is the proof of ownership rather than bonds. Buying stock means having a portion of the company, meaning that you are sharing the risk with the issuer. If the issuer gets the profit, most will be distributed to shareholders in the form of dividends.

Open a new business

Open the new venture also is a form of investment. The reason why people to open new businesses, besides the yield potential of infinite can also to perform work that is actually preferred, develop individual creativity and also achieve financial independence. Keep in mind that the risk of opening new business relatively large, business losses can be up to a bankruptcy that could be more than capital spending. In addition it takes also time dedication, skill, seriousness, determination and perhaps also his talent.

Property

One option that is relatively safe, as long as there is no risk of political turmoil then House/land will not be reduced. Also the potential results of the investment in the form of increased selling value and the proceeds from the lease. Investing in property requires a relatively large amount of funds and also a long-term commitment, because even though its value will continue to increase liquidity constraints, namely the resale of the property which is not easy and it takes quite a long time.

Precious Metals

Gold is an investment vehicle that is very easy, in addition to resale at a price relatively cheap, the price of gold is also rising steadily over time, although selling prices are lower there is a value to which it has been used. Purchase gold also protect from depreciation of the currency, as gold prices rise along with inflation it is similar to save funds in the form of currency of the asi