The Importance of Investment and How to Invest?

Investment, in its simplest form, is defined as the permanent use of money or capital in order to generate income or profit in the future. Therefore, “What is investment?” The answer to the question includes savings made today in order to earn more in the future. However, the fact that the resources used for investment do not run out and even appreciate after the investment is made distinguishes investment from consumption expenditures. In this respect, investing helps grow existing wealth by using the money on hand. The growth of current wealth also demonstrates the importance of investment. So, why is investing important? Preserving the value of your money and ensuring that your future purchasing power is better than the current situation are among the top answers to this question.
When investing, “Why is my money losing value or how does it maintain its value?” you may think. Whether money maintains or loses its value is closely related to the phenomenon of inflation, which is simply defined as a continuous increase in the general price level. Because high inflation reduces the purchasing power of money and causes it to lose its value. For example, if you have the same amount of money in an economy where inflation is 30%, it can be said that the value of this amount of money decreases by 30%. Earning at least a 30% return by investing in the same economic environment shows that you preserve the value of your money. Therefore, the preservation of the value of your money depends on whether you get a return at least equal to the inflation rate as a result of your investment.

How to Invest?

The concept of investment is actually a very broad concept. Buying a real estate with the money you have, converting your money into foreign currency, and buying gold are also considered as investments. In all cases, the person's expectation is that the investment resource he/she owns will maintain its purchasing power in the future and contribute to the improvement of the person's financial situation. So, how should you invest?
When investing, you first need to determine your goals. If your aim is to reach an amount that you can use for your needs in a short time, you can invest your money in investment areas that are considered risk-free, such as time deposits, treasury bills, fixed income investment funds. In this way, you can have an idea about how much your investment will be worth after a certain period and you can use your money by cashing out your investment when necessary. If you do not intend to use your money in the short term and want to grow your wealth for a more comfortable future, you can invest your money in different instruments according to your market expectations. You can use many financial instruments such as stocks, foreign currency, gold and government bonds when investing.