Investment is the meaning of allocating money into assets with the hope that in the future it will provide benefits in face of income. So many peoples invest their money for future advantages like people bought gold and property for future benefit and it is called traditional investment but in modern era people invest money on different types of investment but they not sure about the future their intentions are good but sometimes they face huge loss but we have some different types of investment which surely work and will give you future benefits. We have three types of investments such as own investment, investment on lending & Cash Equivalents.
Own investment is when you buy an ownership investment, you own that asset and expect to increase and give you income benefit and it’s included.
In real estate investment you bought the land or property and then rent it out or resell it this process is called ownership investment, sometimes it can be known as an alternative or classified investment, by this factor, home is basically fulfilling our basic need so, it doesn’t fall under this category.
Starting your own business by putting money on this to earn a profit on service or product, it is also another kind of investment by own.
We all know that stocks mean equity or shares which gave you the stake in the company and its profit, it means that you invest partially in the public company, the percentage of your profile base on the portfolio that you probably made up for stock.
Precious things which are bought for the future income concern is also an ownership investment like metals, collectables and arts the basic meaning of purchasing is to resell this thing for profit.
Lending investment is the leading investment, in this investment you bought the debt for the repaid expectations, you are like a bank, basically, these investments are a low rewarded and low-level investment. Usually, in this investment, we safer investment but their earnings ratio are usually low. It includes:
CDs: the CDs are the certificate of deposits it is same like promissory note which is issued by a bank in the exchange of your money. The bank offers these, they are same like saving accounts except little difference, you just stop taking out your money for some period and instead of this, you receive some interest which is based on how long you invest with them.
Bonds: bonds is also form of debt, bonds are loans, you loan your money to the company or the government and they promise that they pay full back with regular interest payments, and after a committed period you will receive with the fixed interest rate it includes the big chunks of your portfolio will probably make up of bonds.
TIPS: TIPS are known as Treasury inflation-protected securities, these bonds are the backed by the US Treasury, and this is specially designed against to the inflation, when the TIPS matures, you will receive your interest and principal back.
The lending investment balances the things even if you are up for the risk.
Mostly, a smaller percentage of your portfolio with being made up of cash. The cash equivalents are the cash investment which might be based on simple saving accounts and money market fund. The money market investment is another type of lending investment but the same returns are so low, it is same as cash equivalent investment.
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