Wednesday, July 11, 2012

Investment Defined By Emotera

I personally believe that my Math of Investments professor in college has intentionally hidden from us some very viable information or his total incompetence has gotten his self being or worse, was out of his mind during our semester. If he had only knew how important his subject to be integrated to our tiny little minds back then, then I am probably here blogging about how investment has made me rich!

You heard me right. A little stress probably on what is the relevance of the never ending computation of interest - simple or compound interest could have helped us see the real picture of how Math of Investments would play a vital role in getting rich by watching your money grow while you watch the sunset with your wife or husband in Caribbean Islands.

First and foremost, what is investment? In the world wide web, you will find a whole bunch of investment definitions written in different languages and para-phrasing. Most often than not, the complexity of terminologies used made our understand of what is really investment more confusing. Investing does not belong to the bankers or financial guru alone. It is not a taboo word or activity that cannot be discussed or discussed only by and within selected people. 

So, to not overwhelmed everyone including myself, let us confine ourselves with monetary investment as there are as many types of investments as its definition which we will define as an asset or something you owned or you have ownership of that generates cash inflow or income. It may not be the official definition but I am just sharing something that you could picture yourself as having someone with investment already.

A complete set of desktop computers you bought for your newly set up internet shop may be an investment but our discussion of growing your money by way of interest - simple and compound interest will not be applicable as such is not a monetary investment.

Some money stashed away in the bank for emergency purposes like as a revolving or contingency fund can be a monetary investment if not used and has earned interest over time.

Fixed monthly deposit of money to an account withdrawable only after a period of time (time deposit) including the initial money deposited and interest earned which you have an option to roll-over  or re-deposit for a period of time is an investment - monetary investment!

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