financialtreat – will explain about Come on, Know the Meaning of Investment, Types, and Benefits that you will get in the following article. let’s look at this article carefully!
The word investment is synonymous with people with a lot of money. Investment is also synonymous with insecurity. Indonesians in general still do not know about investment. The feeling of not being conducive to saving money in investment products is also an excuse. The majority of our people still rely heavily on savings. Therefore, with the Loyalty Investment you can freely save money.
According to the Financial Services Authority (OJK), mutual fund investors only reach 1.8 percent of the overall middle class in Indonesia. The middle class has a population of 22 percent of the total population of Indonesia. At that time only 0.3 percent of all Indonesians had mutual fund investments and Loyalty Investment.
Come on, Know the Meaning of Investment, Types, and Benefits
On the Indonesia Influence Exchange, the number of single investor identification (SID) increased to 2.28 million. Despite the increase, this number is still small when compared to the overall productive age society in Indonesia. Only 1.09 Percent of the total 208 Million inhabitants.
Therefore, education regarding investment needs to be encouraged again. Considering the benefits that can be obtained from investment can help the finances of the Indonesian people. Actually, what is the meaning of investment? What are the benefits of investing? How do I get started? In this article, you will know the answer.
Definition of Investment
The definition of investment is an investment effort to get a profit in the future. Capital can be money or other sources of energy. By investing, people hope to benefit in the future. School and college, for example, can be recognized as an investment because you invest your time (Source of strength) in the hope of getting a good degree and job after graduation (Future benefits).
In the financial sense, investment is when a person keeps money in a financial asset, such as stocks or bonds, in the hope of receiving more money in the future. Various experts also expressed the meaning of investment. To know more inside, you can read an article entitled Understanding Investment According to Several Experts to better understand it.
Types of Investments
Investments can be classified into two models based on their timeframe. This classification makes investments differentiated into short-term investments and long-term investments. The following is an explanation of each type of investment.
Short-term investments are very likely to be you as an investor to make a profit within a period of one year to three years. That way, you can make profits faster. However, short-term investments provide additional smaller returns.
You can choose short-term investments to meet short-term needs. For example, next year you plan to go home to your hometown. You need funds to buy tickets, buy souvenirs for your loved ones, also have a desire to treat your family or friends to a meal and a walk.
You can also use this short-term investment to prepare for the year-end holiday fund that you plan with friends. Not just saving, you also need to prepare various other things. There are a variety of short-term investment instruments that you can try. Among them are mutual fund investments and P2p Lending investments such as Community Capital. You can choose which investment is tailored to your needs and abilities.
Unlike short-term investments, long-term investments take longer for you to enjoy the results. You can make a profit within three years, five years, or dozens to dozens of times to come.
Although longer, long-term investments provide higher returns. Of course, you can meet your long-term needs by investing your money in long-term investment instruments.
Then, what are the long-term needs that can be realized using long-term investments? You can use this investment to prepare a pension fund. Indeed, retirement time still feels long, but preparing early can help you pursue retirement with a healthy financial atmosphere. You can read the article on how to calculate the pension funds needed to start preparing for your retirement.
If you already have a boyfriend and are planning to marry him, you can use this investment to prepare for your and your partner’s wedding expenses. Of course, the cost of marriage requires a lot of money. Therefore you need to be clear how to properly prepare the funds for the wedding.
Stock investment is one of the long-term invest instruments that you can try. Many people are afraid to invest in stocks because of the spread of myths about stocks. In order not to get me wrong, read the article Myths About Stocks and The Real Facts. Not only stocks, you can also try investing in precious metals such as investing in gold bars.
You are already aware of the meaning of invest. You are also clear about the two types of investment, namely short-term investment and long-term invest. In the following description, you can understand the benefits of making an investment.
Getting Financial Freedom
Financial freedom is a situation when you have passive income that can meet your needs and lifestyle. You can get passive income from the return on invest. You don’t need to work or pursue a career to be able to live comfortably.
If you have an invest with enough profit to meet your needs, you don’t need to rely on work anymore to earn income. Is that possible? Of course it can be if you carry out investment from now on. After investing you also need to pay attention to various things as described in this article to gain financial freedom.
Raising Wealth and Asset Value
The benefit and also the goal of the eventual investment is to increase the wealth and value of the assets you own. The interest rates offered by the invest can increase the wealth you currently have. Especially if you carry out long-term investments. You can feel the impact of compounding.
Simply put, the impact of compounding or rolling interest is the ability of your investment assets to generate sustainable profits. This term is also known as flowering flower. This impact can add value to your assets in the invest that is being made.
Protecting the Financial Situation from Inflation
Not only the two benefits above, but another investment benefit is protecting yourself from inflation. What is inflation, its causes, and what effect it has on your financial situation has been discussed in this article. Historically, Indonesia’s average inflation reached 8.2 percent per year.
If you only save in the bank, the money you save for a long time will run out because the bank can only provide an additional return of 0.5 percent to 1.5 Percent per year. This amount is definitely less than the inflation rate.
Therefore, you need to invest and fight inflation. This is so that the assets you have are not eroded by inflation. If you invest in the form of a business capital loan in Community Capital, for example, you can get a return of 15 Percent to 25 Percent per year. Surely you can make a profit without having to lose money because of inflation.
Read more financial management:
- Benefits of Accounting Systems That You Must Maximize for Business
- Benefits of Capital Markets for Investors and the Economy
Fulfilling Needs that Require Large Costs
It has been discussed before that short-term investments can meet short-term needs. When long-term investment can meet your long-term needs. Invest can help you meet your needs which require large costs.
By making invest, you can collect money that can be used to buy new vehicles, private houses, or realize dreams for Umrah. You can’t realize these needs if you only rely on savings and even your monthly income.
Safe! You have learned about the meaning of investment, the various types of invest that you can choose from, and of course the benefits that you can get through investing. Now you don’t need to be afraid and delay to invest your capital or assets in investment products. Start investing from now on in order to get welfare in the future.
Well, those are some interesting reviews about Loyalty Investment with this article hopefully it can be useful and thank you for your participation.