√ Definition of Long Term Investment, Objectives, Forms, Types & Examples
Definition of Long Term Investment, Objectives, Forms, Types & Examples – In this discussion we will explain about long-term investments. Which includes the notion of long-term investment, long-term investment objectives, forms of investment long term and the types and examples of long term investments are explained in full and light. For more details, please see the review below carefully.
Definition of Long Term Investment, Objectives, Forms, Types & Examples
Let's discuss the meaning first carefully.
Definition of Long Term Investment
Long-term investments are investments where the funds used will be rotated and can only be disbursed when a certain period of time arrives, usually the fastest is 1 year. Long-term investment can also be interpreted as investing part of the capital wealth of a person or company company against other companies or personal to get a steady income or control other objects the. There are several types of long-term investments, such as houses, land, stocks, bonds and others.
Long Term Investment Goals
The objectives of long-term investment are as follows:
- Directing special funds, for example funds for social purposes or the expansion of a company
- The controller or controller of the company or a certain person with ownership of the business
- Guarantee the existence of raw materials and markets for the products to be produced
- Reducing competition among similar companies
- Get passive income in each period, such as interest, royalties, dividends or rent.
Forms of Long Term Investment
There are many choices for companies or individuals in determining long-term investment forms. Such as in the form of land or buildings is called property investment. There are also those who invest in savings or deposits, buy stocks or bonds.
For a company can make long-term investments in the form of bonds or stocks. When compared, the two forms of investment have advantages and disadvantages.
Types of Long Term Investment
The types of long-term investments include the following:
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Gold
Gold is a very valuable and rare 99.99% precious metal that can be accepted by all people. Gold can be easily formed or often used as jewelry. Gold investment is a safe and profitable long-term investment.
In uncertain conditions, gold has a more stable selling value and is considered as a substitute for currency without asset limitations that are important and safe at any time can be used as money at any time needed. The US Dollar exchange rate is the same and in the same direction as gold, so many people invest in gold.
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Property
Another form of long-term investment is investment in the form of property, starting from land, houses, shop houses, apartments, gardens and so on.
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Share
A company can get funds from investors by issuing or issuing shares. Unlike a bond, a stock is a statement and not a debenture and does not require redemption to issue
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Mutual Funds
Investors can invest indirectly, namely by using intermediary mutual fund companies. Funds that have been collected from investors in large numbers will increase the bargaining position of mutual fund companies.
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Pension Program
There are many insurance companies in Indonesia and have marketed and introduced superior products that have been integrated with pension fund investment programs. Until retirement comes, investors will get a number of funds originating from the results of development from the insurance company.
However, investing in a pension plan does not earn much interest when compared to saving at a certain bank, which has a higher interest rate. The results of investing with a pension program are also erratic than other investments. The amount of profit and interest that will be obtained often depends on the size of the profit that the insurance company gets.
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Bond
Bonds, namely proof of having provided loans to the party issuing the bonds and must be repaid on the maturity date. Bonds also have the right to profit sharing, if received by the bondholders corporate form, with recharacterization as dividends, the portion of the profits received is not taxed.
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Insurance
Insurance is an agreement between the insured and the insurer, namely the insurance company. Insurance comes from the word Insurance which means coverage. The insurer will be willing to bear a number of losses that are very likely to occur in the future after the insured agrees to pay the money with a premium.
Example of Long Term Investment
- Property (apartments, hotels etc.)
- Land (rent, boarding house)
- Gold bar
Thus has been explained about Definition of Long Term Investment, Objectives, Forms, Types & Examples, hopefully can add to your insight and knowledge. Thank you for visiting and don't forget to read our other articles.
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