What is Investing? In simple terms, Investing is parking your extra funds in some security over a period of time for a return. In technical terms, it is the process of placing money in some medium such as stocks, bonds, real estate, etc., in expectation to receive some future benefits. More specifically, an investment is the current commitment of money for a specific period in order to derive future payments that will compensate for (1) the time the funds are committed (2) the expected rate of inflation and (3) the uncertainty of the future payments.
Before you start investing, you need to be sure of the reason for investing. Different people have different investment objectives and goals depending upon their source of income, spending habits, saving pattern, liquidity requirements and payment obligations. The purpose of investing can be -
- To supplement your current income with more income through dividends or interest.
- Shelter from taxes.
- Saving money for major purchases such as a car or a house.
- Planning for retirement.
- Children's education.
For some Fun Pictographic Quotes On Investment and More Click On the Link Below
Wednesday, September 3, 2008
Purpose of Investing
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