What is Investment?

The  reason that  most  people  experience failure  when it comes  to  making  and  establishing  various  investments  is the fact  that they  enter into  the   investment  sector  blindly without  having a clue  of  what it  entails. They  engage  themselves in   investment activities  without  first learning  and  appreciating the  rules of  this  particular  game. In  each and  every  sector  where  there  are  rules one  must be  able  to first understand  them so  that they  can know how to avoid  breaking them. 

The  term investment  is  used  to refer to any valuable establishment  that is  set up  with  an  objective  of  generating income. For an establishment to qualify to be termed a s an investment, it has to firstly be valuable and important with a particular monetary value.

Apart from being valuable, it must have the capability of generating income for the owner. Ability to generate income is the most crucial aspect of any investment. Any investment  no matter  how  valuable kit might be  to the  owner  that  lacks  the  ability to make money  for  the  owner is  by  default  not  an  investment. The  place  where most  people tend to go  wrong is their  tendency to view an  investment as being  something  valuable  only  and  for  getting that it  must  be looked  at from an  income  generating perspective. This  type of  uninformed view  pint  in moist  cases  end up  costing the  owners a huge fortune.

This point of view  is perhaps popular  among people  due  to its  wide usage in most  educational institutions  who view  investments or  assets as properties  that are of  significant   value despite not being in a position to generate money. As a result most ordinary people and companies tend to ignorantly classify liabilities as assets or investments. In conclusion, the  two most  important  aspects  of  an investment that any would be investor should  do  before investing kin any form of  business is the value of the would be investment and  the  amount of  money that  it can generate  for you  in the long  run.