investment
Many people seek to develop the money in their possession, and increase its value over time, so they are keen to apply one of the methods that help them to do so, and the higher the value of the small sums of money, the more satisfied they feel about the financial achievement that has been achieved during a specific period of time, usually keen Individuals to choose the easiest means that help them increase the value and volume of money in their possession, and all operations that contribute to the development of money are called investment.
investment definition
Investment As for the language, the term investment is derived from the word (invested), which means to obtain a benefit from money, as for technically, investment is defined as a means that contributes to developing the value of money, and increasing it by relying on the use of one of the investment methods available in the market. Another definition of investment is that it is a financial tool that contributes to achieving interest and profits that increases the percentage of money saved, but it is not necessarily that the investment is always successful; Because its success depends on the nature of the financial and investment strategy that the investor applies before starting to think about implementing the investment process.
Invest a small amount
Many individuals have relatively small amounts of money, and are looking for a set of ideas that will help them invest and increase them; Any conversion of a small amount into a large amount during a specific period of time, which may be measured in weeks, months, or years. When the individual succeeds in investing a small amount and converting it to a large amount and then converting it to a larger amount, then he can achieve the concept of investment and apply it realistically in a correct manner.
Ways to invest a small amount
Example: To invest $500 and convert it into $1,000, one of the methods that help the success of this investment can be applied, namely:
Bonds: They are a type of securities that carry a variety of financial value, or specific categories of money. Bonds work according to the principle of financial debt; That is, the investor buys the bond and postpones the payment of its price until he sells its value again for an amount higher than the purchase price, thus being able to make a profit from the investment amount, and then invest it again or save it. Example: Buying bonds worth $500 on a deferred payment period, and then offering them for sale at a value of $600, and when selling them, a profit of $100 is achieved.
Shares: They are financial shares that are purchased within the capital of companies and institutions that offer part of their shares for trading so that the investor (the shareholder) becomes a party to the owners of companies and institutions, or among the contributors to the growth of capital over time, and profits are usually achieved through shares. Put it up for trading by selling it. Example: buying shares worth $500, and after days or months of buying them, they are sold at a value of $800 when their value increases in the financial market, which contributes to applying the correct concept of investment and achieving financial profits.
Investment funds: It is a group of financial funds that contain stocks and bonds that investors purchase their contents, and then work on investing them according to their respective fields, and they may be sold later at a price higher than their purchase price, and thus the concept of investment is applied in a correct manner, and usually focuses Investment funds convert the value of bonds and small shares into a large value, in the event that their owner does not want to sell them at a price higher than their purchase price.
investment characteristics
Investment is generally characterized by a set of characteristics, namely:
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.
The investment is usually based on two types of assets; They are real assets such as buildings and vehicles, and financial assets such as sums of money and stocks.
Investment is classified as a type of commitment that contributes to developing existing resources and increasing their size over time.
The importance of investing
Investment is of great importance in influencing societies, and thus individuals and establishments, and the importance of investment is summarized as follows:
Investment contributes to increasing opportunities for local production in countries.
Investment is one of the most important factors responsible for global economic development.
Investing in the province helps to develop savings for individuals and institutions.
The investment supports entrepreneurship, by providing financial support for new ideas.
Investment types
Before applying the investment, the individual or the establishment must choose the appropriate type of investment to apply, and the following is a set of the most important types of investment:
Small projects (short-term investment): It is a set of ideas that contribute to achieving a satisfactory income for people and companies, by working to provide capital that contributes to supporting specific ideas during one financial year, and then works on developing and developing them in order to benefit from them. ; Like small productive projects that start with simple capital, and then amplify over time. Examples of small projects: Home pickles business.
Insurance (long-term investment): It is one of the important types of investment, which is measured in long years, and insurance is usually divided into two types, namely: insurance related to individuals, and examples of it: life insurance that contributes to providing a sum of money to the individual in the event of exposure to risk, or His family in the event of his death. As for insurance in the field of companies, it contributes to maintaining the development of material assets, especially those that are damaged and need updating or replacement over time.