So you are interested to start making money online? Then, investment is the key. Investment refers to the use of one’s money for the intention of earning more money in future. To make an investment is to put money in with the intention of a profit/loss in the near or distant future. Simply put, to make an investment means possessing an asset or some thing with the intention of earning money from that asset or the appreciation of that asset, in either the short term or the long term. In this sense, investing is buying something now and selling it later at a higher price.
There are various types of investment. It may be a business, buying shares in a firm or in government, buying real estate property or even borrowing money from family and friends. The motive behind investment is for the accumulation of wealth, usually as an investment commodity. This can also be used for speculation. Various types of investment are broadly classified into two sections, namely, private and public.
Private financial goals are generally related to the individual. They include the ambition of making a lot of money fast. For such investors, they seek stocks and bonds that will yield them high returns within a relatively short period like a year or so. The investors who have long term financial goals prefer to invest in the financial markets wherein their investments will yield higher profits over a longer time frame.
Public financial goals are normally set by government agencies and central banks. These objectives can include the establishment of stable inflation levels, growth of the national currency, protection of the currency against external factors that may cause depreciation of the currency, and employment generation. Public investments include bonds, stocks and other securities that are issued by the government or by central banks.
A bond issues a promise to pay a particular interest rate for a definite period of time and is secured by a fixed deposit of a certain amount. Bonds are one of the most widely traded financial assets. A bond is sold either via individual sales or through broker dealers. The purchase of bonds by the financial institutions and banks is called bond investing. The purchase of bonds by individuals is termed as bond shopping.
Shares are an important type of financial investment. Like bonds, shares are generally issued by the corporations and other large organizations to increase their cash flow and build up capital. The price of shares is usually determined by supply and demand. The main purpose of capital appreciation is to increase the profit of the investor, and so shares are bought when the company’s share price is rising and sold when the price is falling.