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WHAT IS INVESTMENT

Friends, INVESTMENT in English translates to investment or investment in Hindi, and this post will explain the meaning of investment.

  • Investment is the activity of the Financial World in which one’s funds are invested in a location from which additional funds can be made.
  • Friends, simply depositing money in a bank account is not an investment; the definition of investment is to earn money from the money you already have and additional money, i.e. income.
  • Simply put, investing is the process of using your money to generate income.

When we use our money for the purpose of earning income or profit in the future, this is known as an investment.

For instance, if we purchase a home for the purpose of renting it out to generate income, the funds used to purchase the home are referred to as INVESTMENT.

Similarly, if we purchase a stock with the intention of selling it in the future for a profit and we continue to receive income in the form of dividends, then the money used to purchase the stock is referred to as our INVESTMENT.

INVESTMENTS AND RESOURCES

In the financial statement, i.e., our balance sheet, investments are recorded in the asset column; thus, we can say that investments are an income-producing asset.

In other words, investing is the process of purchasing an asset in order to generate income or profit in the future.

INVESTMENT IS A LONG-TERM PROCESS, AND THE MAJORITY OF INVESTMENTS DO NOT PROVIDE INSTANT PROFITS; WE MUST WAIT FOR INVESTMENT VALUE TO INCREASE OR INVESTMENT VALUE AFTER INVESTMENT TO INCREASE.

For instance, if we make a fixed deposit in a bank, we must wait until the end of the deposit’s lock-in period before receiving its benefits.

RETURN ON INVESTMENT

As we have seen, investment is an ongoing process undertaken to generate income or profit; the money invested in investment is referred to as our capital.

And this profit or loss is known as Return on Investment (ROI).

ROI is calculated as Total Value of Investment minus Investment Value.

Here, Total Value of Investment is our investment’s present or future value, and Investment Value is the amount of money we invested.
For instance, if a one lakh rupee fixed deposit yields two million rupees after five years, the return on investment (ROI) will be one lakh rupees.

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ROI is not always expected to be positive.

ROI can sometimes be negative if the reason for increasing Total Investment Value diminishes.

For instance, if we purchased a share for Rs 100,000 and instead of its price increasing, it decreased to Rs 90,000, we would incur a loss of Rs 10,000, or a 10% negative return on investment.

WHAT IS THE DEFINITION OF INVESTMENT
WHAT IS THE DEFINITION OF INVESTMENT

INVESTMENT SCAM (QUICK RICH SCAM)

There are many companies on the market that offer very attractive investment schemes, and we deposit our hard-earned money with them because they promise a great return. However, many of these companies later vanish, and our hard-earned money is lost.

Therefore, it is essential to invest your Hard-Earned Money in the proper location.

QUICK RICH scheme is a scheme created by fraudsters and their accomplices with the intention of stealing money from people by assuring them of getting rich as soon as possible, doubling the money quickly, and then disappearing from the market; we should be cautious with such companies and obtain as much information as possible before investing.

In closing

Investing is the art of making money out of money, and if you want to make money out of money, you must learn this art.

Investment is because money is linked and no one wants to lose money, and in such a situation, investing without good investment knowledge becomes a risky task, and in such a case, rather than profit from investment, the chances of loss increase; therefore, you invest. Before investing, educate yourself on the subject so that you, too, can achieve financial independence by learning how to make money.

Will discuss additional investment-related matters….

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