The basic meaning of investment

 

According to Sadono Sukirno (1997: 107), investment can be defined as the expenditure of investors and companies to purchase capital goods and production equipment to increase the ability to produce goods and services available in the economy.

On the other hand, according to Downes and Goodman (2006), financial investment is the investment of money in the form of a business at a particular time from anyone who wants to profit from the success of his work. Investment budgets are very flexible and vary from investor to investor.

In other words, investment can be defined as the activity of investing money in a company in order to create and provide better services in the hope of optimizing profits in the future.

Investment purpose

Investments can be defined as the spending of an investor or company to purchase capital goods or production equipment to increase the ability to produce goods and services available in the economy.

On the other hand, according to Downes and Goodman (2006), financial investment is, at some point, investing money in the form of a business of people who want to profit from a successful project. Investment budgets are very flexible and vary from investor to investor.

In other words, investment can be interpreted as the activity of investing money in a company to create and provide better services in the hope of optimizing profits in the future.

Investment benefits

In addition to increasing production and service capacity and optimizing profits, there are many benefits to investing. Some of these benefits are:

1. Inflation prediction

Inflation is a situation when the price of goods and services continuously rises and the purchasing power of money in the region decreases. By investing, you can get savings in the form of assets that can be sold at their current value to reduce losses.

2. It can be an income in the long run

Depending on the contract, investors usually have the right to earn profits from the company according to the ownership ratio. The more money you invest in the company, the greater your ownership. Therefore, if the company is profitable, the dividend will be large.

3. Prepare for future needs

Some types of investments are made to meet specific needs in the future, such as education insurance and annuity insurance. This is an important investment and will allow us to focus more on spending and plan for the future.

Types of investments
There are different types of investments, which are distinguished from some, such as the source of funding, the form of investment, and the factors that affect the investment.

1. Investment by assets

Judging from the assets, there are two types of investments:

– Real investment
Invest in the form of real objects such as buildings, land and machinery.
– Financial investment
An investment is an indirect claim letter or document for the actual activities undertaken by the company issuing the letter / document.
2. Investments are based on influencing factors

Investments can be divided into two types based on external factors.

– Autonomous investment
Autonomous investment is a type of speculative investment such as the purchase of securities that are not affected by individual income.
– Induction investment
Induction or induction investment is an investment driven by an increase in national income, which increases the demand for goods and services.

3. Investment based on funding

This type of investment differs from the origin of funding and can be divided into two parts. In other words, investment from foreign capital and investment from domestic capital.

4. Investment by form

Based on its form, investments can be divided into two types.

Portfolio investment
Portfolio investment is an investment in the capital market using securities products such as stocks, sukuk and ORI.
Direct investment
Direct investment refers to the direct expenditure of funds such as building construction and acquisitions.