Investment definition: Objectives, benefits, and types of investments
General Investment Definition
What is investment? The definition of investment is an activity to put funds in a certain period in the hopes of using the funds can generate profit and/or increased investment value.
In league, according to Wikipedia, the investment definition is a term used for activities related to accumulating in the form of assets as a hope for profit.
The term investment is not a stranger among businessmen. Investing in regards to matters pertaining to finance and economics.
Understanding of investments according to experts
Some experts in the field of economics have explained what is investment, including:
1. Haming dan Basalamah
According to Haming and Basalamah the investment sense is expenditure in the present for the purchase of real assets (property, car, and other) or also financial assets with the aim to get greater results in the future.
Investments are closely related to the withdrawal activities of the sources of funds used for the procurement of capital goods at present. With these capital goods are expected to produce a new product flow in the future.
2. Mulyadi
According to Mulyadi investment sense is attribution of the sources of funds in the long term to get the profit results in the future.
3. Sadono Sukirno
According to Sadono Sukirno investment definition is the activity of spending or spending investors to buy capital goods and also production equipment with the aim of adding the ability to produce goods and services that Available in the economy.
4. Henry Simamora
According to Henry Simamora investment definition is an asset used by the company to increase its wealth through the distribution of investment proceeds (e.g. interest income, royalties, dividends, rental income, and Investment value or also for other benefits for a company investing through a trade relationship.
5. Sunariyah
According to Sunariya investment definition is a capital investment for one or more assets owned that usually have a long period of time with the hope to get profit in the future.
6. James C VanHorne
According to James C VanHorne The meaning of investment is the activity of cash utilizing at this time, with the aim to get the results of the goods in the future.
7. Fitz Gerald
According to Fitz Gerald's investment sense is an activity related to the withdrawal efforts of various sources of funds used for the procurement of capital goods at present. The capital goods will then be expected to produce a new product flow in the future.
8. Salim HS and Budi Sutrisno
According to Salim HS and Budi Sutrisno investment sense is the activity of investing by investors, both local investors and foreign investors in various types of businesses that are open for investment. The objective of investing is to earn profit.
Investment objectives in Business
From the understanding of investment that has been mentioned above, investment is a investing activity that has several objectives. The objectives of investments include:
1. Earning a fixed income
For example if you are investing in a feeding company you deserve a few percent of the company's profits on a regular basis as long as you invest in the company. So in this case you will continue to receive royalties or profits.
2. Enlarge the Business
In addition to the form of money profit, by investing can be used for social purposes, enlarge business and others.
3. Business Guarantee
If investing in a supplier, then there will be a guarantee of your business no shortage of raw materials and continue to acquire the market to sell the product.
4. Reduce competition
Investments can also reduce competition between companies engaged in the same field.
Benefits of investing in business
In relation to the investment objectives mentioned above, many entrepreneurs are investing with their primary purpose to profit and expand their business.
Referring to a meaningful investment meaning as a form of capital investment, the investment in the business is beneficial to include:
1. Improve assets
One example is when a person buys a land or property at this time as an investment, then sells it in the future with a value that is repeatedly multiplied from the price when buying it.
2. Fulfilling future needs
Investing in the present purpose is to be used as a supporter of future life needs. One example is investing in gold, where the goal is to be sold in the future as a child education fund.
3. Thrifty Lifestyle
By investing a person will try to allocate the money to important things only. In the end it will make the person more efficient.
4. Avoiding any indebtedness receivables
Still related to #3 points, with a simple and efficient lifestyle, of course someone will avoid debt problems.
Those who have committed to invest regularly will avoid debt problems. And it will eventually make the finances better.
Investment forms
In general, the form of invetation can be divided into two, namely:
1. Investing in real assets
It is an investment that a person is in the form of an invisible eye or can be seen physically. For example Investment in gold, property, land, precious metals and others.
2. Investing in financial assets
This is a person's investment in the form of marketable securities. For example Stocks, deposits, and so forth.
Types of investments
There are several types of investments that are common in the business world namely:
1. Deposits
Investment in the form of money deposits to a company with an investor guarantees will receive a profit in the form of interest within the agreed period. Investments in the form of deposits are differentiated into term deposits and deposit certificates.
2. Stocks
Invetation in the form of stocks is common to large companies. Stocks are another form of assets of the company.
For example, if you have a 50% stake in a company then you have half the assets of the total assets that the company owns. Stocks are generally made in the form of marketable securities indicating ownership.
3. Bonds
Bonds are generally carried out on businesses that provide capital lending services. The advantages gained by investing in bonds are higher than deposits because the pegged interest is also higher.
However this way is more risky because if the borrower capital is bankrupt then there is a possibility of debt not paid.
4. Mutual funds
In addition to stocks, funds are now also popular among both business and community. Funds are a place to raise money collectively and the funds raised will be managed by the manager.
Profit and loss will be divided into all investors. So that mutual fund can be called as a gathering place for investors.
5. Property Investment
This type of investment includes non-real investments because it is not money but is a building like a house, a building or an apartment. This form of investment is considered most profitable because the property sale price rarely dropped even always up.
6. Gold
Investments can also be in the form of gold. As with property, gold investment tends to be more profitable than real investment forms. Generally gold is invested in the form of gold bullion.
The above is a brief explanation of the understanding of investment, objectives and investment benefits, as well as investment types. Hopefully useful.
