Share Market

There are separate definitions for investment in finance and economics. In finance, investment is the process of putting money into a place/object with an expectation of gain. Through analysis it has a higher degree of security and return on the principal amount within an expected period of time. One can even call it saving or deferred consumption.

There are times when speculative schemes are made to sound like investments. News sources and promoters report on speculative financial transactions like stocks, mutual funds, real estate, oil and gas leases, commodities and more as investments. This is where the investor must be smart to notice and steer away from these things. Money has to be invested wisely and it’s important to invest in the right place and at the right time.

To avoid speculation, an investment must either be directly backed by sufficient collateral pledging or insured by sufficient assets pledged by a third party. A thoroughly analyzed loan of money that is backed by collateral with greater immediate value than the loan amount is also considered as an investment.

In the same light, investing is a method of buying assets in order to gain profit in the form of easily predictable income such as interests, dividends and appreciation over a long-term. It is not about keeping your money stacked in one place hoping that the investment you made will be the next big killing. It has nothing to do with speculative financial transactions. It is all about taking reasonable risks to harvest a very hefty and continuous reward.

Investment is not only meant for those who want to earn good bucks but for everyone. It helps you use your own strategy and build a good backup solution in case of a severe financial risk or inflation. It could be in any form, either bonds, mutual funds, certificates of deposit, stocks etc for a creating a good wealth. If you don’t want extra money for yourself then you might as well keep it for your coming generations. The surplus could well enough be given to the needy.

Also, no investment is big or small. Investments can start from any price. There are a lot of investment options. As and when one grows in confidence, investments can start being varied. It’s funny, but good to notice that the money you earn on your investments accumulates faster than your salary.