About Different Kinds Of Investments
Keywords: Investment, real estate, commodities, savings
INVESTMENT is the placing of funds for the purpose of getting some income return and/or an increase in the invested principal. Return in the form of interest constitutes a rental for the use of the money and as such has been socially acceptable for thousands of years; indeed, tablets and inscriptions from ancient Egyptian and at a specified rate was a common business transaction even in those days. The modern world contains many investment media; among them are real estate, life insurance, commodities, bonds, stocks, and savings accounts.
All forms of investment have in common the following characteristics :
1. the amount in-vested, called the principal;
2. the rate of re- turn, usually stated as an annual rate in per cent;
3. the degree of risk;
4. the liquidity, or how quickly the investment may be converted into cash;
5. the capital gain, or increase in the value of the principal, sometimes termed the grown factor.
Assuming a certain principal amount, the other four factors vary widely with the nature of the investment.
In order to achieve high safety and high liquidity, growth and rate of return must be sacrificed. On the other hand should high return or growth be desired, it is equally apparent that some degree of safety and liquidity must be sacrificed. No investment will combine high safety with a high rate of return; these are always in inverse relationship, and it must be borne in mind that this is a basic fact of both savings and investment in general.
If you like to be an investor you must first accumulate funds for investment, and to keep your savings safe must be your first consideration. This will immediately limit the number of media into which such funds may be placed. After you have accumulated an adequate amount, then will be the time to consider whether higher risks are justified.
How much should be the goal before further investment, with attendant higher risks, is attempted? The answer cannot be given in the form of an exact amount, because your total income and expenditures will influence the latter; but most authorities agree that a “nest egg” or “rainy day fund” must first be obtained which is the equivalent of at least three months’ salary. After that, further savings may be made for investment at a somewhat higher risk. Thus, if you guard against unforeseen emergencies, a program of investment with some degree of security and peace of mind may be
undertaken. We must emphasize that no short cut should be resorted to here.
Investment for the person with an average income adds up to different steps:
1. A slow accumulation of cash for retirement or as an emergency fund,
2. The built up of an additional fund for investment,
3. using those savings for investments in different areas like stocks, options and/or property.
Leokadia Angela runs her property auction site on: www.real-bargain-property.com
Previous Articles Highlighter:
2003 California Wildfire Worst In Its History To That Time (1)
Two thousand seven hundred homes and buildings where destroyed and many businesses had to close. This wildfire was to become the most expensive fire to ever hit the United States.
Do You Really Have An Idependent Contractor's Agreement ? (2)
In addition to these factors the the court or appeal and the supreme court may consider the legislative intent. In looking at work related injuries the courts look to the intended purpose of the legislative act and in evaluating workers' compensation coverage the courts have interpreted the act as: (1) It seeks to ensure that the cost of industrial injuries will be part of the cost of goods rather than a burden on society; (2) to guarantee prompt, limited compensation for an employee's work injuries, regardless of fault, as an inevitable cost of production; (3) to spur increased industrial safety, and; (4) in return, to insulate the employer from tort liability for his employees' injuries.
Why Walk When You Can Ride? (3)
Keywords: golf training aid, golf equipment Golf is an excellent sport for your health. You can be outside enjoying the beauty of nature, stretching, bending, and keeping fit. However, some of us enjoy golf for the game itself and are not interested in walking eighteen holes.
How To Choose An Insurance Company (4)
There are a number of options in home insurance among companies. Ask friends and relatives about their insurers. Were claims paid promptly without a great deal of red tape?
What Is Combinatorial Chemistry? (5)
Once a library of these chemical compounds from the combinatorial chemistry has been established they are put into so called "libraries". Once a library has been established the company and chemists must work efficiently and very quickly in the screening of these compounds.
How To Increase Traffic To Your Website (6)
So how does this increase traffic to your website? You place a link to your website in the "About the Author" section of the article. Now you have an unpaid, but high-quality link to your website which a visitor or a search engine can follow.
Marketing Products By Writing Articles And Email (7)
For instance, if you sell widgets, you might develop a course that teaches people how to use widgets or how to care for their widget. Experts agree that an email course can be written for almost any product that you can imagine if you put enough thought into it.
Stay At Home Parent; Would Home Based Business Encourage Social Isolation? (8)
You are going to be able to stay at home and get your work done, and you are also going to be able to show your family that you care about them by being there for your kids all of the time.
The Aristocrat Among Dogs (9)
The puppies should increase in weight at the rate of 3 lbs. a week, and this necessitates plenty of flesh, bone and muscle-forming food, plenty of meat, both raw and cooked.
How To Organize Your Home On A Budget (10)
Gosh, where do we start. It's a mess and it is impossible to see how it is going to look any better without spending a lot of money. You are wrong!!
Newer Articles Highlighter:
August 24, 1992: Hurricane Andrew Attacks Florida, Massive Damage Is The Result (1)
The need to take precautions in an effort to limit the effects of a natural disaster is essential. Many insurance companies now offer discounted rates to companies that include disaster planning into their standard business plans.
Choosing The Right Diamond And Sapphire Rings (2)
Although not nearly as romantic as a surprise proposal you can play it safe and suggest you both shop together to look for diamond and sapphire rings for the engagement.
Discover How You Can Find The Best Affiliate Networks (3)
There are forums and discussions you can participate in to get good and reliable feedbacks. 5. A program with a compensation plan that pays out a residual income and a payout of 30% or more would be a great choice.
How To Boost Your Affiliate Commissions Overnight In 3 Steps (4)
Choose the ones that have a generous commission structure. Have products that fit in with your target audience. And that has a solid track record of paying their affiliate easily and on time.
Getting The Proper Culinary Education Can Lead To A Great Career (5)
There are some natural kitchen artists that can just toss in a few ingredients and create a masterpiece. However, most of the great chefs of the world had to start from the bottom and work their way up.
Buying A Sapphire Ring (6)
Which ever design of ring you choose I am sure the lucky lady will be more than happy to receive a classy and unique sapphire ring. Vicki Churchill writes for several sites including www.finest-diamond-and-sapphire-rings.com and href="www.finest-diamond-rings.comincluding how, where & what to buy.
5 Effective Dog Training Essential That Often Overlooked! (7)
So next time you tell your dog "down" to get them off the couch and they lie down and look at you, its because they were told to lie down there!
Discover How To Use Product Recommendation To Make More Money As An Affiliate (8)
Most of the techniques and tactics can be learned easily. No need to go anywhere and any further. They are available online, 24 hours a day and 7 days a week.
Do You Really Have To Ban Dessert? (9)
4. Take only three bites. On those days when you absolutely can't do without the most fattening dessert on the planet, go ahead and indulge. But -- only take three normal sized bites.
The Power Of Submitting Articles For Back Links (10)
Now, what happens if your website is not returned in the top five results from a search? Not too many visitors will find your site. But, what if your site has a high ranking?