What is Investment?

Investment is the purchase of assets by considering the current and future economic conditions to get a certain yield in the future. What needs to be considered is that the higher the yield we expect, the higher the risk we have to bear. This is where we need to be smart about placing the assets we own so it will not incur losses.

Types of Investmen

Types of asset investment can be classified into 2, whis is

1. Real Assets
   Tangible assets such as gold, land, property, patent rights and others. Real asset investments have long-term yields that tend to always increase, although in the short term, their prices can be very volatile.
2. Financial Assets
   Intangible assets, such as ownership certificates that can be traded and have high yields that match their risks. Examples of financial assets are
   • Money market instruments
   • Stocks
   • Bonds
   • Mutual Funds

Why Invest?

This can be explained through the differences between conventional saving and investing.

• Saving means setting aside money without expecting an increase in the value of the money saved. If a cursory analysis of various savings accounts at banks is done, they offer a savings interest rate of 1-3% per year. However, if we take into account the influence of inflation, the prices of goods always increase every year with a percentage that far exceeds the savings interest. So in essence, there is a reduction in the value of the savings owned.
• Investing means hoping for an increase in the value of money over time, which will provide a profit. The money expected to provide the added value is saved in the form of wealth called an asset.

Capital Loss Risk

The risk that occurs when an investor sells capital market products such as stocks at a value lower than when the investor bought them.


Liquidity Risk

A company whose shares are owned is declared bankrupt by the court or the company is dissolved. In this case, the claim rights of the shareholders receive the last priority after all the company's obligations can be met (from the sale of the company's assets). If there is a remainder from the sale of the company's assets, the remainder is distributed proportionally to all shareholders. However, if there is no remaining company assets, the shareholders will not receive any return from the liquidation.

Investment Calculator

A tool used to calculate the value of investments owned and to plan investments, using certain variables such as stocks, bonds and money markets. Investment calculators make financial planning easier because many things are taken into account in investing, such as inflation rate, time frame, and benchmark interest rate. So our sacrifice in a certain asset will really get the desired yield.

Do I need to invest?

Questioning the need for investing is the same as asking the need for insurance. Just like insurance, investing is a form of protection and preparation for the future. The purpose of investing is to build wealth and prepare for retirement, education and health expenses, or to achieve financial independence.