The question is : Why do we need to invest ? Every person who invests certainly have a different rationale . There are many reasons for this , one of which is the preparation of future planning as early as possible through the preparation that is tailored to the needs of today's financial capability . This means designing an achievement would be certain things that can be started at this time . As we know over time the value of the currency can be reduced due to inflation affected , for example, rising prices of goods and services each year it must , inflation this is one of the main reasons why we need to invest , both for funds and assets that already exist or will be we have so that its value can be maintained and certainly expected to increase .
From the description of the meaning of the above investments , we can take the 4 main things are the reasons for investing :
1 . The need for future or current needs that can not be fulfilled .
2 . There is a need to protect the value of assets that have been held .
3 . The desire to increase the value of existing assets .
4 . Inflation .
Investment risk
Every investment has always been a major factor in addition to the profit and loss , is due to circumstances in the future which can not always be accurately predicted . It could be that the results obtained are not investments in line with expectations , the opposite could even result in the loss of the plan and in accordance with the risk factors and rewards of the investment sector . Investment uncertainty makes the actors are not completely immune to the risks posed , then the investment in this context becomes a part of life , so the fact people always invest either intentionally or unintentionally , learn , work and do business can be understood as an investment , the investment can be seen as a process of making a choice, not only to increase the wealth but also maintain and protect what already exists .
Types of Investments
* Savings and Deposits
Saving money in the bank is the simplest way of investing , practical and easy , supported by liquidity and ease of retrieval at any time , the bank is also relatively safe , because until now the bank deposits guaranteed by the government . Development of banking technology makes access of bank facilities become increasingly varied . Banks also provide a form of interest , quite large . Of course depending on the type of savings interest . The principle is the larger banks and old people save money in a bank is generally the greater the interest . For example , similar to the savings deposits alone but with a certain time period , the interest offered on deposits is relatively higher than the savings rate , because it is then when the contract deposit is taken before the stipulated time period and agreed it will be subject to a penalty .
Saving money in the bank is the simplest way of investing , practical and easy , supported by liquidity and ease of retrieval at any time , the bank is also relatively safe , because until now the bank deposits guaranteed by the government . Development of banking technology makes access of bank facilities become increasingly varied . Banks also provide a form of interest , quite large . Of course depending on the type of savings interest . The principle is the larger banks and old people save money in a bank is generally the greater the interest . For example , similar to the savings deposits alone but with a certain time period , the interest offered on deposits is relatively higher than the savings rate , because it is then when the contract deposit is taken before the stipulated time period and agreed it will be subject to a penalty .
* Bonds
Bonds are debt securities with a certain period . Bonds can be issued by a company , government or other agencies . By buying bonds then we will get a reward from the bond principal invested capital plus interest , the interest is a percentage of the amount specified by the issuer and generally higher than the interest rate or other securities that are considered safe , but also high risk bonds when offering high interest . Interest payments are made at regular intervals , eg 3 months or 6 months or yearly . Payments of principal itself is done when the bond matures , the bond that is the date on which it expires .
* Shares
Stock is proof of ownership (equity) instead of debt. Buying / owning shares is entitled to a significant asset of the company, meaning that shareholders also will share the risk with the issuer (also called the emiten). When companies make a profit, some will be distributed to shareholders in the form of dividends.
* Opening a New Business
Self-employment / entrepreneurship is a common step to invest to increase sources of income. The reason why people open new businesses, in addition to the pursuit of profit potential infinity, also because by hobby and work really liked, develop individual creativity and also achieve financial independence is certainly a pleasant thing. But keep in mind that the risk of opening a new business is relatively large, business losses can be up to the bankruptcy. Opening a new business it takes too dedication of time, skill, seriousness, determination and perhaps talent. But learning from failure and experience is the best teacher.
* Property
One option is a relatively safe investment property, as long as there is no risk of political turmoil the house / land will never decrease in value. Also the potential return on investment in the form of increasing the selling value and rental yields over time. Investing in property requires a relatively large amount of funds and also long-term commitment, although it has a value that is constantly evolving, but the investment in this area has sufficient liquidity constraint is low due to the sale of the property takes a long time back.
* Precious Metals
Purchasing jewelry like gold can also be a means of investment, but can be sold again with relative ease, the price of gold continued to increase over time, although the selling price for gold jewelry in the form of lower due to the value and elements of art that has been used. Purchasing gold also protect from currency depreciation, including investment gold is immune to inflation. The price of gold continues to increase in line with inflation, buy gold at this point is similar to deposit funds in the form of foreign exchange, they both protect from the risk of currency debasement.
* Collectable
Investments in the form of a collection of objects such as works of art, although many non-economic considerations in investing in this area, but keep in mind that although the value for collectable items tend to go up but not scalable, and where liquidity constraints are also difficult to resell and estimated resale value. This investment is private.
* Futures Markets
This market is emerging from the onset of forward transactions , ie transactions performed today but the payment and delivery of commodities is done at a later date that has been set . This transaction protects buyers and sellers from unexpected price fluctuations . The time difference between the transaction with the delivery of a commodity that can be used for months by the speculators to trade the forward contract . These speculators do not produce / consume these products , contracts traded on the expected future price fluctuations due to changes in supply . The futures market was originally only in commodity products , but then spread to the capital markets , foreign exchange and money markets .
* Mutual Funds
For someone who wants to invest in the money market or capital market but do not have sufficient expertise or do not have at the same time concerned with the risk to be borne when push yourself to invest in mutual funds . Mutual fund is a container that collects funds from investors and then managed by the Investment Manager to the various investment instruments . Types of mutual funds vary according to the type of investment instruments to choose from for example a bond , stock or a mix of bonds and stocks . Besides mutual fund based short-term debt instruments with maturities of less than 1 year ie mutual funds " foreign exchange market " . Each kind of mutual fund has the potential risk and reward are different depending on the typical investor .
Once you know the types of investments for your future , then start investing now . And hopefully by reading this article may open your horizons to invest for a better future .
Bonds are debt securities with a certain period . Bonds can be issued by a company , government or other agencies . By buying bonds then we will get a reward from the bond principal invested capital plus interest , the interest is a percentage of the amount specified by the issuer and generally higher than the interest rate or other securities that are considered safe , but also high risk bonds when offering high interest . Interest payments are made at regular intervals , eg 3 months or 6 months or yearly . Payments of principal itself is done when the bond matures , the bond that is the date on which it expires .
* Shares
Stock is proof of ownership (equity) instead of debt. Buying / owning shares is entitled to a significant asset of the company, meaning that shareholders also will share the risk with the issuer (also called the emiten). When companies make a profit, some will be distributed to shareholders in the form of dividends.
* Opening a New Business
Self-employment / entrepreneurship is a common step to invest to increase sources of income. The reason why people open new businesses, in addition to the pursuit of profit potential infinity, also because by hobby and work really liked, develop individual creativity and also achieve financial independence is certainly a pleasant thing. But keep in mind that the risk of opening a new business is relatively large, business losses can be up to the bankruptcy. Opening a new business it takes too dedication of time, skill, seriousness, determination and perhaps talent. But learning from failure and experience is the best teacher.
* Property
One option is a relatively safe investment property, as long as there is no risk of political turmoil the house / land will never decrease in value. Also the potential return on investment in the form of increasing the selling value and rental yields over time. Investing in property requires a relatively large amount of funds and also long-term commitment, although it has a value that is constantly evolving, but the investment in this area has sufficient liquidity constraint is low due to the sale of the property takes a long time back.
* Precious Metals
Purchasing jewelry like gold can also be a means of investment, but can be sold again with relative ease, the price of gold continued to increase over time, although the selling price for gold jewelry in the form of lower due to the value and elements of art that has been used. Purchasing gold also protect from currency depreciation, including investment gold is immune to inflation. The price of gold continues to increase in line with inflation, buy gold at this point is similar to deposit funds in the form of foreign exchange, they both protect from the risk of currency debasement.
* Collectable
Investments in the form of a collection of objects such as works of art, although many non-economic considerations in investing in this area, but keep in mind that although the value for collectable items tend to go up but not scalable, and where liquidity constraints are also difficult to resell and estimated resale value. This investment is private.
* Futures Markets
This market is emerging from the onset of forward transactions , ie transactions performed today but the payment and delivery of commodities is done at a later date that has been set . This transaction protects buyers and sellers from unexpected price fluctuations . The time difference between the transaction with the delivery of a commodity that can be used for months by the speculators to trade the forward contract . These speculators do not produce / consume these products , contracts traded on the expected future price fluctuations due to changes in supply . The futures market was originally only in commodity products , but then spread to the capital markets , foreign exchange and money markets .
* Mutual Funds
For someone who wants to invest in the money market or capital market but do not have sufficient expertise or do not have at the same time concerned with the risk to be borne when push yourself to invest in mutual funds . Mutual fund is a container that collects funds from investors and then managed by the Investment Manager to the various investment instruments . Types of mutual funds vary according to the type of investment instruments to choose from for example a bond , stock or a mix of bonds and stocks . Besides mutual fund based short-term debt instruments with maturities of less than 1 year ie mutual funds " foreign exchange market " . Each kind of mutual fund has the potential risk and reward are different depending on the typical investor .
Once you know the types of investments for your future , then start investing now . And hopefully by reading this article may open your horizons to invest for a better future .
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