I’ve been trying to wrap my head around exactly what it is that I’m trying to do when I “invest”. The Merriam-Webster Online Dictionary says it’s “to commit money in order to earn a financial return”, but anyone can do that by whacking their money in a term deposit or online savings account. That doesn’t sound like what people commonly call “investing” to me. After doing a fair bit of reading about “investing”, I settled on investing as being “converting cash into cashflow”. Then I thought some more and realised you don’t necessarily need cash to create cashflow. So perhaps it is simply “creating cashflow” or perhaps “creating cashflow with as little cash as possible”. One thing I am sure of is that it is not simply “to create cash” or “to get rich”, as many average people and average investors seem to think it is, although investing may involve creating cash in the short term with a view to turning it into cashflow later on. Anyone got a better definition?
I think you are getting caught up with detail here.
What is the point of a definition?
As earlier said “Just Do It”
Cheers,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I think I do…
Investing is a commitment of money, time or effort to achieve a desired result.
Examples….
* investing in your child’s education by buying a mathematics software
* investing the continued well-being of your local community by volunterring at the local soup kitchen
* investing in shares to obtain financial benefitAs you can see, NOT EVERYTHING IS ABOUT MONEY!
TMA
http://www.email4money.info
Investor Links
First Home Buyer WebsiteThanks for your definitions TMA! I agree…not everything is about money. My wife-to-be and I are currently in the process of setting goals for our life together, being financial, spiritual, social, emotional, etc. Investing will play a large part in helping us achieve financially and then in the other areas as a knock-on effect. Of course, it’s easier to set a goal to do something once you have a clear idea in your head of what it is you are trying to do, hence my interest in the definition, Simon. [cap]
There has of yet been no improvement on Benjamin Graham’s definition of investing. For those unaware of Graham he was mentor to Warren Buffet.
“An investment is an operation, which upon thorough analysis, promises an adaquate return and a margin of saftey, anything not reaching these expectations are speculative.
mgs2, I read that in “The Warren Buffett Way” too, now that you mention it. Thanks for reminding me. I couldn’t help agreeing with Graham’s logic throughout that chapter.
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