According to The Merriam-Webster Dictionary. An investment is an outlay for income and profit. It is the sum invested or a property purchased. That’s the problem with English Dictionaries they do not always give us what we want right? Well here’s my definition an investment is ANYTHING we give up in order to get something BETTER in return. The two points to note here are
1. ANYTHING
2. BETTER
Why did I emphasize these two words? This is why; you can invest anything in anything, you can invest your time, your money, your power, your skills, your TV I know that sounds funny but think of this. If I give up my 42 inch plasma TV set because I need to purchase a ticket to China and the trip would earn me thrice the price of the TV set, would that not be an Investment? Moreover an investment can not be said to have occurred if in the process of investing a person does not get something better than what he put inside, this means that an investment However, Investors differ from traders but the truth is that they are relatively the same because the principles are the same – buying and selling. But an investor knows one thing that the trader does not and I will share that principle with you in a minute. But before then, understanding the principles and dynamics of investments, calls for the examination of three main related concepts. These concepts are:
• Income
• Consumption and
• Savings
These Factors would be discussed in details in Demystifying Investments Part 3.
By: Ejodame Kayode
About the Author:
1. ANYTHING
2. BETTER
Why did I emphasize these two words? This is why; you can invest anything in anything, you can invest your time, your money, your power, your skills, your TV I know that sounds funny but think of this. If I give up my 42 inch plasma TV set because I need to purchase a ticket to China and the trip would earn me thrice the price of the TV set, would that not be an Investment? Moreover an investment can not be said to have occurred if in the process of investing a person does not get something better than what he put inside, this means that an investment However, Investors differ from traders but the truth is that they are relatively the same because the principles are the same – buying and selling. But an investor knows one thing that the trader does not and I will share that principle with you in a minute. But before then, understanding the principles and dynamics of investments, calls for the examination of three main related concepts. These concepts are:
• Income
• Consumption and
• Savings
These Factors would be discussed in details in Demystifying Investments Part 3.
By: Ejodame Kayode
About the Author:
Please send your comments about this article.
Ejodame Kayode is a renowned investor and administrator