The word investment has been traveling around the world. It becomes one of effective way to get profit. People can purchase something in order to earn income. You will get more money but you must face higher risk. So, knowing basic type of investment below will be a good start.
Basic Investment Type
Ownership investments is a condition where people buy valuable thing then wait and observe its value. The value of ownership assets will fluctuate with market conditions, potentially giving you a higher return than you might receive from lending your money (extension.org). Among many types of investment, this is the most popular investment and it is also quite profitable.
Ordinary people likely to purchase small item like jewelry for future investment. Gold is the common choice to invest. Other investments are profitable too however some are too expensive to purchase. A citizen who only works as a waiter has less possibility to purchase real estate for example. Some investment also can be treated to raise the value. For instance, in a case of real estate, people can work a remodeling or upgrade the building to raise the value.
Example: stock, business, real estate, precious object (e.g jewel, gold, famous painting, etc).
If your dream is to be a banker you don’t have to work in a bank to achieve that. With lending investment you will act as a banker who lends the money to companies. Shah posted on moneycontrol.com that, “When you get protection as a lender then you have certain rights in terms of security and in terms of payment of interest ahead of other ownership investors.” Compare to ownership investments, it has lower risk but might give less income than you think. The profit is based on interest rate during a certain period.
Example:saving account and bond.
This investment makes you convert your money easily in a form of cash. A cash equivalent is a highly liquidinvestment having a maturity of three months or less (accountingtools.com). You cannot call a cash equivalent if it s more than three month.
Example: market funds, commercial paper, marketable securities, money market holdings, short term government bonds, and treasury bills.
To invest on something, people don’t have to be an expert in finance, marketing, and so on. Though everyone can invest, the problem lay on the good observation. It is including the things you purchased and the market condition. Everything will work well as long as you make smart calculation. Remember that any type of investment has different risk and return.