An investment is simply the allocation of money, with intelligent judgement.
The two purposes behind investment are to
- Beat inflation
- Increase income
There are two methods in fulfilling the two purposes;
- The value of the asset purchased increases in value.
- Permission is granted (via a lease) for another party to use the asset, for a fee.
There are two essential criteria in purchasing an asset that will fulfil the above;
- There is future potential for increased demand.
- Asset quality is supported, enhanced and determined by other quality factors such as location, as well as positive, economic and social activity.
An investment is an asset that is the effect of a growth trend, which in turn, places INCREASING demand on that particular type of asset.
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