Investment and its types on basis of assets investment

 Investment 

The act of allocating money or capital with the hope of achieving future income, appreciation, or profit is referred to as investing. It entails investing in an asset with the intention of making a profit, such as stocks, bonds, real estate, or other securities.

Investments are a crucial component of personal finance because they enable both individuals and businesses to accumulate money over time. They can boost their financial stability and reach their long-term financial objectives, such as retirement, education, or property ownership, by making prudent financial investments.

While making investment selections, investors must take into account a number of variables, including market conditions, the financial stability of the firm or item being purchased, and their own risk tolerance. To assist in making decisions, they could also turn to financial counsellors or investment managers for expert counsel.

On the basis of assets investment are of two types :

1. Financial investment
2. Real investment 

Financial investment 

The act of investing money in assets or securities with the hope of making a profit or receiving income is referred to as financial investment. 

Example: 

Stocks, bonds, mutual funds, real estate, commodities, etc 

Typically, investors purchase financial instruments with the hope of making a profit, either through capital appreciation (an increase in the asset's value over time) or through consistent income (such as dividends or interest payments).

The kind of asset invested in, how long the investment is held for, and the market's overall performance are just a few of the variables that affect how much return an investor can anticipate.

Real investment 

Real investment is the purchase or acquisition of tangible assets with the hope of making money through their usage or long-term appreciation. 

Examples:

Real estate, Machinery, equipment, and infrastructure.

Real investment is distinct from financial investment, which entails the acquisition of securities with the hope of receiving a return on the investment, such as stocks or bonds. Real investments are regarded as long-term investments since they frequently include substantial capital requirements and a longer time horizon for creating a return.