Investment trends are strengthening along with people's financial awareness in World Employees will usually set aside some income to invest.
What is an investment and why do we need to understand it? Although often used for mention of large types of investment, in fact investment is an activity that can be found everyday on a small scale. For example, saving or buying products with long-term benefits.
This activity is highly recommended to manage limited resources because it focuses on developing asset value, not just deposition. Are you interested in investing? Do not rush to make a decision, check out reviews of what is an investment, types of investments until for example here!
Investing for Employees and Beginners
What is an Investment?
Investment is an investment activity to be withdrawn in the future with greater value. In short, through investment, one expects the value of an asset to increase over time.
Investment assets can be in the form of energy, time, gold, stocks, mutual funds and so on. The definition of investment is also mentioned in Big Book as investing money or capital in a company or project for the purpose of obtaining profits.
Benefits of Investment
In short, the purpose of investing is to generate income. It should be understood that the benefits obtained from the investment can be in the form of interest, dividends, royalties or rent. In addition, there are several other benefits of investing, including:
Controlling a Company
One of the benefits of investment is the value that can be in the form of investment in a company. The existence of a partial equity ownership makes the will of investors calculated in decision making in the company. In some conditions, a person invests to maintain or create good relationships between companies.
Ensuring the Availability of Raw Materials
Some agencies deliberately invest in raw material production businesses related to their business. Thus, the agency can ensure the availability of raw materials needed for the operations of the main company.
Meeting Future Needs
One of the benefits of investing is to prepare for unexpected needs in the future. The value of assets that tend to rise will be a means of seeking profits that can be at any time disbursed or exchanged for other resources when needed.
Building a Frugal Lifestyle
Investment activities arise from the spirit of saving for the future. Thus, investors can be better trained to allocate their income to long-term assets rather than falling for consumptive and impulsive actions. This encourages a frugal and debt-free lifestyle.
Type of Investment
For those who are interested in making investments, you need to really understand the type of investment that will be made. Because, this will affect the profit opportunities and the specifications of the applicable agreement. Learn about the following types of investments
Form of Investment
There are two types of investment, namely real assets and financial assets. What is real asset investment? This form of investment can be done with visible or invisible assets, such as land, precious metals, and property. Meanwhile, financial asset investment is a type done with securities, such as deposits and shares.
In general, investments can be divided into two types based on the time period, namely long-term and short-term. This arrangement will certainly affect the expectation of profit time. Therefore, it is very important for investors to understand the type of option of their investment timeframe.
Long-term investment includes investment activities within 3 to decades. Although long, the value of the profit tends to be greater than the short term. There are various types of long-term investment instruments offered, such as pension funds, stocks, and precious metals.
What is a short-term investment? Investors can decide to invest in a short period of time for 1 - 3 years. Although it tends to be worth less.
This type of investment can be a solution for those of you who need profits for immediate purposes. Examples of short-term investment instruments are mutual funds and P2P Lending.
If you are one of them, consider the various investments that are suitable for the following employees as has been discussed in other media, including the type of investment for beginners.
The most commonly known first investment option is deposits. This investment option does not require any skills to get started. The trick is enough to provide capital to be stored in the bank with a certain period. Deposits can usually be deposited within one month to two years.
The bank will then provide a yield of a certain percentage according to the amount of money deposited, usually about 5%. This type of investment is suitable for beginners because it is relatively easy.
2. Mutual funds
Mutual funds are seen as more profitable investments because of their higher interest rates than other investment models. Investors also don't have a benchmark amount of money to invest.
Bonds are investments in the form of buying securities within a certain period of time – usually more than one year – from parties who need capital. Bond offers can come from state or private companies.
After the investment period expires, the securities will be withdrawn by the investment giver and the money will be returned. A yield in a certain percentage will be given per month during the time of the investment contract.
Gold is a relatively stable investment instrument. Gold is stored as an investment tool in the form of pure gold bullion. When sold the price of gold will rise following the exchange rate.
Investing in gold is now easy. Investors do not need to store gold privately because now financial services such as pawnshops and e-commerce also provide gold savings services.
Although quite risky, stock investments can bring large returns. Even so, investors need to learn the intricacies of stocks and market trends over the stocks they want to buy.
6. P2P Lending
P2P Lending is a type of investment in which investors will fund a borrower, both individuals and companies.
P2P Lending profit can reach 18% if the borrower succeeds in his business. This investment is also easy although risky because there are now various P2P Lending platforms that will distribute the capital.
In addition to the variety of benefits, investments also have some risks that investors need to pay attention to. There are at least 7 definite risks, namely:
- Interest rates
- Foreign exchange rate
- Sovereign or country
Looking at some of the risks above, investment activities also require a strategy. If you're just starting out, you should use small numbers while strengthening your analytical skills.
Although attractive, investment should not be done in a hurry. Because prospective investors need to understand the objects, potential, provisions to risks from investment activities. Here are some tips on making a smooth investment.
- Determine clear investment objectives
- Avoid actions that are less grounded or speculative
- Consider the investment timeframe
- Determine the amount of capital needed to select the investment object
- Understand the risks of this type of investment (avoid debt, make sure there is another stable income, and prepare extra funds) *Rizky Nur P