Learn about Investment: What Is An Investment?

Learn about Investment: What Is An Investment?
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What Is An Investment?

I am going to avoid any here. An investment is an asset that keeps on multiplying or increasingin value over time even without further addition to the initial input. Every investment instrument works with time, The earlier you start, the better and the greater the benefits or rewards you get. Four notable ideas in the above definition are worth considering even if briefly.

1. Asset

Every investment is an asset. Robert Kiyosaki, the Millionaire Teacher, in his best-selling book Rich Dad, Poor Dad explains that an asset is any thing that puts money in your pocket. This means that an asset should continue to put money in your pocket as long as the investment is in place.

2. Multiplication

Every investment should have the potential to increase. In other words, when you put your money in an investment, say at 20% interest per annum, at the end of the tenor of the investment, your money would have increased by 20%. So investments should increase or multiply in value.

3. Value

Accountants define an asset as something you own which has value. But assets in accounting do depreciate. But investments, on the other hand, don’t depreciate in value. Their value increases, so it’s important you understand that any thing that takes money out of your pocket, that depreciates in value, that does not increase your overall financial worth does not possess investment value but is a liability. Every investment must possess value. And this value should be on the increase, never on the decrease, if you must create wealth.

4. Investment Does Not Occupy Your Time

As an entrepreneur, you spend your time, skill and efforts and such to make the business grow. But as Investor, you just send your money on errand by investing it to continuously create value for you without you being necessarily involved in the process.

The rich are rich because they behave like big corporations – they have developed their own financial baskets. Kola Owolabi. 

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