What is Investment and Return on Investment.

What is Investment?          

                 

Friends, our topic today are what is Investment. Today we will know what is investment and what is the significance of investment in our life,

so let's start,

Investment is the work of this financial world in which your money is put in such a place where more money can be made.

Friends, just depositing money in the bank are not an investment. Investment means the money that you have with money and the other is money. If put simply, the use of your money to get income is called investment.

Whenever we use our money for this purpose so that we get income or profit in future, then this use of money is called investment.

Like - if we buy a house for the purpose that we get income by renting it, then the money used to buy the house is called INVESTMENT.

Similarly, if we buy a stock for the purpose that we can get profit by selling it in the future and we also receive INCOME as a dividend, then the money used to buy the stock is called our INVESTMENT.

Financial statement means that investment is placed in the property column in our balance sheet, in this way we can say that INVESTMENT is our assets from which we get income.

Investing is a process in itself and in other words, it is the process of buying an asset that is future to earn income or profit.

INVESTMENT is a long term process. Most investments do not provide immediate benefits. After investing, we have to increase the value of INVESTMENT VALUE or gain from the investment.

Like if we make a fixed deposit in the bank, then we have to wait till the lock in period of the fixed deposit, then we get the benefit from that fixed deposit.

  Also Read :  What is Mutual Fund.

RETURN ON INVESTMENT - profit from investment

We have seen that investment is a Continue Process which is done to earn income or to earn profit, the money invested in the investment is called our capital.

                                                                                                                                                                                                                                                        And the return on investment is called Return on Investment (ROI),

ROI = Total Value of Investment - Investment Value

Here Total Value of Investment is the current or future value of our investment, and Investment Value is our imposed money.

For example : If we get 400000 in 5 years on a fixed deposit of  Two lakh rupees, then our Return on Investment (ROI) will be Two lakh rupees.

Sometimes ROI can also be negative if the total investment value decreases due to increase,

For example, if we bought a share of Rs 200000, instead of increasing its price to Rs.180000, then we lost a loss of Rs.20000 i.e. we got 10% Negative ROI.

                                      INVESTMENT SCAM

There are many companies in the market that bring very attractive investment schemes, and by offering lots of benefits on the investment, we accumulate our hard-earned money, and many of them later Disappears, and thus we lose our hard earned money.

Therefore it is important to invest your Hard Earned Money in the right place

The QUICK RICH scheme is a scheme created by some fraudsters and fellow people for the purpose of convincing people to get rich quick double the money quickly and then disappear from the market. , Beware of such companies and we should get as much information as possible before any investment.

Also Read : What is Share Market.

INVESTMENT is the art of making money with money, and if you want to make money with money then you need to learn this art,

Because investment is linked to money and no one wants to lose money, and if investing without good knowledge of investment becomes risky and in such a situation, the chances of loss in place of investment increases, so before you invest you must get good information about investment so that you too can learn how to make money and gain financial freedom.

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Thank you.