Many people seek to develop their money and increase their value over time. They are keen to apply one of the ways that helps them. The more money the small amount has contributed to the satisfaction of the financial achievement that has been achieved over a specified period of time, Individuals to choose the easiest means to help them to increase the value and volume of money in their possession, and called all operations that contribute to the development of money called investment.
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Definition of Investment
Investment is an investment term derived from the word “invest”, which means to obtain a benefit from money. The term defines investment as a means to contribute to the development of the value of money and increase it by relying on the use of one of the available investment methods In the commercial market. Another definition of investment is that it is a financial instrument that contributes to interest and profits that increase the amount of money saved, but not necessarily that the investment is always successful because its success depends on the nature of the financial and investment strategy applied by the investor before starting to think about the actual implementation of the investment process.
Invest Small Amount
Many individuals have relatively small amounts of money and are looking for a range of ideas that will help them invest and increase them. That is, transferring the small amount to a large amount over a specified period of time, measured in weeks, months, or years. When an individual succeeds in investing a small amount and converting it into a large sum and then transferring it to a larger amount, he or she can realize the concept of investment and apply it realistically.
Best Ways To Invest A Small Amount
Example: To invest $500 and convert it into $1000, one way to help this investment succeed can be:
– Bonds: A type of securities with a variety of financial value, or specific categories of money, and operates bonds in accordance with the principle of financial debt; that is, the investor buy the bond and postpone payment until the sale of its value again higher than the price of purchase, and so Of making a profit from the investment amount, and then invest it again or save it. Example: Buy a $500 bond on a deferred payment period, then offer it for sale for $600, and when you sell it a $100 profit will be made.
– Shares: are financial shares purchased within the capital of companies and institutions that offer part of its shares to trade to become an investor (shareholder) as a party to the owners of companies and institutions, or shareholders in the growth of capital over time, During circulation by selling. For example, buy shares worth $500, and after days or months to buy them are sold at $ 800 when the value of the financial market, which contributes to the application of the right concept of investment, and the achievement of financial profits.
Investment funds: A group of financial funds that contain stocks and bonds that investors buy their contents and then invest them according to their own fields. They may be sold later at a price higher than their purchase price. Thus, the concept of investment is applied correctly, Investment funds will convert the value of bonds and small shares to a large value, if the owner does not want to sell them at a price higher than the price of their purchase.
Investment generally has a range of characteristics:
– Investment is one of the means of financial development in various business sectors.
– Investment is not limited to a specific category of individuals or companies, but includes all categories.
– Investment is usually based on two types of assets: real assets such as buildings and vehicles, and financial assets such as funds and stocks.
– Investment is classified as a type of commitment that contributes to the development of existing resources and increases its size over time.
Importance of Investment
Investment has great importance in influencing societies, and hence individuals and enterprises, and summarizes the importance of investment as follows:
– Investment contributes to increasing domestic production opportunities in countries.
– Investment is one of the most important factors responsible for global economic development.
– Investment helps to maintain the development of savings in individuals and institutions.
– Investment supports entrepreneurship by providing financial support for new ideas.
Types of Investment
Before applying the investment, the individual or the establishment must choose the type of investment to be applied.
Small Projects (short-term investments): A group of ideas that contribute to the satisfactory income of individuals and companies, through the provision of capital to contribute to support certain ideas during one financial year, and then working on the development and development in order to benefit from them ; Small-scale enterprises that start with simple capital, and then are amplified over time. Examples of small projects include the work of pickles.
Insurance (long-term investment): It is an important type of investment, which is measured for many years. Usually, insurance is divided into two types: insurance related to individuals, for example: life insurance that contributes to the provision of money per person in case of danger, His family in the event of his death. Insurance in the field of companies contributes to the preservation of the development of physical assets, especially those that are damaged and need to be updated or changed over time.