Concept in Definition ABC

Investment an economic and financial issue but also a daily one

The investment concept is widely used in areas such as economy, finance and business, although, although this is where it has a formal specification, the word investment is is very present in our daily lives and not only entrepreneurs, traders or stock traders they think about investments, common people also do it because basically it will involve at least the duplication of a sum of money that is decided to be placed in favor of a business or a entrepreneurship.

That is, those of us who are not specialists in the aforementioned areas can invest without problems in whatever we want, if we have a sum of money that allows us to do so. Most of them even get advice from specialists or people with experience in this regard because the idea is that an investment will improve the quality of life that has.

Now, always, the ideal thing will be to consult experienced professionals in the subject so as not to make mistakes that end up losing all our capital.

Action and the result of investing. Placement of the capital held by an individual or a company in a context that means a future profit for them

In its broadest sense, the term investment refers to the action and the result of investing, while, in the strict economic sphere, an investment will be the placement of the capital held by an individual or a company in a context that means a future profit for them. In an investment, generally, you will be resigning yourself to a benefit that could be obtained today and now for a future one and that to a certain extent is unlikely.

Variables of an investment

An investment has three variables: expected return, which is what the person or the merchant intends to earn; the accepted risk; the probability to obtain the expected profit and the time horizon, which is the moment in which the profit can be perceived.

Individuals and companies are always behind investments

Individuals, as such, are constantly thinking of investments that will cost them today, but tomorrow most likely much more money to enjoy. For example, today I have a savings of 10 thousand dollars, with that money I can buy the car I want, however, I decide to place it in the shares of a company with the intention that later it can sell them at a higher price, a fact that of course is more than safe than selling the car at a higher price on the day of morning. As we know, cars are goods that over time and the kilometers traveled lose their value initial and of course in the future we will be able to sell them at a much lower amount than that which had to be disbursed for their buys.

In the case of companies, it is much more common for them to subject their earnings to some type of investment on a daily basis. that you will not see the fruit today but rather in a future term, for example, the purchase of a machine that can double the production in a month, it is a safe investment and one of those that companies usually make because although it will imply a considerable outflow of money from profits, in the short term, with that productivity As the machine will increase, it will be possible to multiply them.

For example, a company that produces work uniforms buys a machine that will allow it to double its output of a thousand pants per day. Obviously, when you buy it, it will be an expense for the company, but soon that money will be able to be more than recovered thanks to the fact that the machine allows production to be doubled.

Also, there are other types of investments that a company makes, but more than anything they do not turn out to be with the objective of obtaining some commercial profit but rather because they are necessary for its functioning compliant daily life, such as buying a computer or any other type of input that will be used in the office and that will speed up the work carried out there.
And these purchases are considered as an investment also because precisely buying an element or input that contributes to doing the job more easily and efficiently should be considered as a hyper investment positive.