Investment is not just about money, but is also about developing one’s potential to be smarter and cleverer in one’s field. For example, completing education up to university and beyond.
This time, we will discuss what investment is. Suitable for those of you who have an interest in investing, read this article so you don’t miss it.
What is Investment?
Quoting the Big Indonesian Dictionary (KBBI), investment is investing money or money in a company or project for the purpose of making a profit. Meanwhile, the term investing is defined as the activity of investing money or capital.
Tandelilin through the book Portfolio and Investment (2010) defines investment as a commitment to a certain amount of funds or other resources made at this time, with the aim of obtaining a certain amount of profit in the future. Investors buy a number of shares now with the hope of gaining profits from increases in share prices or a number of dividends in the future, in return for the time and risks associated with the investment.
Lipsey in his Introduction to Macroeconomics (1997) said that investment is expenditure on goods that are not currently consumed, where based on the time period, investment is divided into three, namely short-term, medium-term and long-term investments.
Jogiyanto in his book entitled Portfolio Theory and Investment Analysis (2010) explains that investment is delaying current consumption to be used in efficient production over a certain period of time.
Then Sumanto in the book The Influence of Capital Market Development on the Indonesian Economy (2006) explains that investment is a commitment of a certain amount of funds in a period to obtain the expected income in the future as compensation for the units invested.
Furthermore, Mankiw in the book Introduction to Macroeconomics (2000) defines investment as goods purchased by individuals or companies to increase their capital stock.
From the explanation above, investment can be interpreted as the activity of sacrificing capital to be “planted” in the hope that its selling value will increase. Then it comes back at a higher price. That way, investors will make a profit.
General Types of Investment
1. Financial Investment
The most common type of investment made is in finance. It should be noted that there are various options that can be used to do this. Among them are the money market, bonds and shares. Even though they are different, all three can reap profits, but with different time periods and opportunities.
Investments can be made by buying securities or valuables that are usually traded on the stock exchange. However, in this sophisticated era, it is possible for you to invest via smartphone. The way to do this is by downloading an investment application that carries out directed transactions. Even so, you should do further analysis to find out the risks.
2. Property Investment
Another option worth considering is investing in property. For example, land, houses, shophouses, buildings, and the like.
You can be an owner who rents or sells property. Apart from that, there are also things called brokers or third parties. Realtors can make a profit with commissions from property owners.
3. Business Investment
investment can be made by providing capital in exchange for ownership (equity) or taking promised investments (debt). Including new businesses starting up or those that are already running.
According to Midtrans, company assets will be a means of increasing profits and generating profits for investors. Another goal is to develop assets in the future.
4. Commodity Investment
Commodity investing involves money being injected into physical goods or raw materials in the hope of gaining from price fluctuations over time. This refers to two types of commodities.
The term commodity in the business world tends to refer to the financial management of agricultural products. For example coal, gold, silver, sugar, coffee, cocoa, and others.
Illustration, investment (Freepik)
5. Investing in Art and Collectibles
This type of investment is aimed at those who like to buy rare, antique, artistic and valuable collectibles and sell them. For example, paintings by artists from ancient times whose works were sold for thousands to hundreds of thousands of US dollars.
Not only that, this investment can be done by collecting cars, motorbikes and other furniture with resale value. Usually items also contain historical value that is considered important so that they attract the attention of those interested.
6. Investment in Education and Skills
It’s not just about wealth, investment can be done by developing your inner potential. For example, by studying and taking certain skills courses.
The goal is to increase one’s own value and explore potential. So as to increase professionalism so that you are ready for a career in the world of work.
That’s the discussion about what investment is and a complete explanation. Investment is worth making for those of you who have capital and the desire for a better future.