‘Investment’ in simple terms

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Most often than not, the word “Investment” sounds very confusing to beginners who aspire to become strategic investors. It’s in this light that i intend  to breakdown the meaning of investment as simple as possible to stimulate a greater interest in building wealth and stepping into financial security.

Investment in an economic sense basically, is the purchase of goods and services that are not consumed today but are used in the future to create wealth.

In finance sense, an investment is the purchase of a financial product, monetary asset or other item of value purchased with the idea that it will provide income in the future or appreciates and is sold at a higher price. Fundamentally, investment means the use money in the hope of making more money.

Generally, every activity that is done today but which yields profit or interest at a later date can be described as an investment. Investment involves postponing your consumption today in order to put your savings to work.

Investment is often seen as the bridge between having savings or surplus cash and reaping returns. It must be noted that, investment has the potential to move the savings or surplus funds of persons or entity that do not need them to another person or entity who requires those funds for expansion.

A few of the masses may stumble into financial security. But for most people, the only way to attain financial security is to save and invest over a long period of time. You just need to have your money work for you. That’s investing, and that’s taking control of your financial freedom.  It’s worth it, give it a try!

Please remember the value of investments can go down as well as up and you may not get back the amount you initially invested. If you have any doubts about which investment product is right for you please contact your financial adviser.

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