How much money do I need to invest to earn 2000 per month? investment is limited to large projects and large capitals However, this belief is completely untrue; It is also possible to invest small amounts. Therefore, many small capital owners try to develop it and increase its value over time, using one or a few of the resources that can help them in doing so. Usually, individuals tend to choose the easiest and safest way to achieve this goal. All activities that contribute to the development of money are called ‘investment’.
How do you invest a small amount of money?
- Some may think that investing is only limited to large projects and large capital.
- However, this belief is completely untrue; It is also possible to invest small amounts.
- Therefore, many small capital owners try to develop it and increase its value over time.
- Investment is characterized by a number of features, the most important of which are:
- Investment is one of the means of financial development in different business sectors. It is not limited to a specific category of individuals or businesses, but contains all categories.
- It also depends on two types of assets; These are real assets such as buildings, vehicles and machinery, and financial assets such as amounts of money and shares.
- Finally, investment is a kind of commitment that contributes to the development of existing resources, increases their scope and develops over time.
Definition of investing in money
- Investment is idiomatically ” a means that contributes to the development and increase of the value of capital by relying on the use of one of the investment methods available in the market ”.
- Another definition of investment is also “that it is a financial instrument that contributes to the achievement of interest and profits that increase the value of the money saved.”
- It is noteworthy that the investment is not necessarily always successful; Because its success depends on the nature of the financial and investment strategy applied by the investor.
- Many individuals have relatively small amounts of money, and are looking for the best and fastest means that will enable them to invest and increase their value; Convert a small amount into a large amount over a period of weeks, months or years.
- If the individual succeeds in investing a small amount and converting it into a large amount and then converting it to a larger amount, the concept of investment is realistically achieved in a correct way.
The importance of investing money
- The importance of investment is illustrated by looking at its impact on societies, individuals and businesses; It contributes to the increase of local production opportunities and is one of the most important factors responsible for development at local, regional and international level.
- In addition to the above, investment helps maintain savings for institutions and individuals, and plays an important role in supporting entrepreneurship through financial support for new projects.
Before applying the investment, the individual or the business must choose the type of investment that is suitable for its goals and aspirations. The following are a group of the most important types of investments:
Small Business (Short Term Investment):
- It is represented in a set of ideas that contribute to the achievement of a good and sufficient income for people and businesses, by providing capital that contributes to the support of certain ideas during one financial year, and thereafter works on its development and development. over time.
- Like small projects that start with simple capital, and then develop over time. Examples of small businesses include housekeeping babysitters, sewing and knitting.
Insurance (long-term investment):
- It is one of the important species that has been measured for many years. Insurance is usually divided into two types, namely: insurance related to individuals, and examples are: life insurance that contributes to the provision of an amount of money to the individual in case of exposure to danger or obtained by his family in the case of his death.
- As far as insurance in the field of companies is concerned, it contributes to the preservation of the development of tangible assets, especially those that are damaged and that need to be modernized, developed or replaced over time.
Ways to invest a small amount
Among the most important ways to invest small amounts, we mention the following:
- It is a type of securities that carry a diversified financial value or specific classes of money. The bonds work according to the principle of financial debt; That is, the investor buys the mortgage and postpones the payment of the price until he sells it for an amount higher than the purchase price, and thus he can make a profit from the investment amount and then reinvest the amount or save it. .
- For example: buy bonds worth $ 500 over a deferred payment period and then offer them for sale at a value of $ 600, and if you sell them, a profit of $ 100 is made.
- These are financial shares purchased within the capital of companies and institutions that offer a portion of their shares for trading on the financial market.
- The investor (the shareholder) thus becomes a party to the owners of companies and institutions, or among the contributors to the growth of capital over time.
- Shares earn profit for their owner by offering it for trading by selling it. For example, if you buy shares worth $ 500, and after days or months after you buy them, they are sold at a value of $ 800 if their market value increases, which contributes to the application of the correct concept of investment and achieving financial gain for the investor.
- It is a group of financial funds that consist of stocks and bonds, and the investors buy their content and then work to invest it according to their respective fields.
- It can later be sold at a price higher than the purchase price, and therefore the investment concept is applied correctly.
- Investment funds usually focus on converting the value of bonds and small shares into a large value, in case the owner does not want to sell it at a higher price than their purchase price.