What Investment Really Means
Many of us today have bank accounts with various banking institutions across the country, rather than keeping them under our pillows or 'susu' boxes as was a usual practice of the olden days. Banks keeps our money safer and rewards us something little on our savings at an annual interest rate. For those who understands, it's just a compensation for our decision to keep our money with them. Lots of people still think that is investing. Hell No! they are two different things, only that you need to save what you want to invest. Aside, Investing is something far different from this practice. It's the language and culture of the Rich, and not just one at all. They only understand what it means and are ready to play by its norms. Well! Understanding what Investment means isn't that difficult if and only if you are prepared to learn it, and it's the main reason why those who play by its principles get much and much more rewards.
So let's see what we mean when we talk about investment;
An investment is simply the current commitment of money for a period of time in order to derive future payments (returns) that will compensate the investor for three main things:
- The time the funds were committed
- The expected rate of inflation
- The uncertainty of future payments
It can also be viewed as putting money into something with the expectation of a gain, or in simple terms "the use of money with the hope of getting more money". By foregoing consumption today and investing their savings, investors expect to enhance their future consumption possibilities by increasing their wealth.
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