Investment is an important key to achieving financial success, especially when started at a young age. By understanding the different types of investments available, you can build a strong portfolio of assets and ensure a stable financial future.
Check out the following review to find out the types of investments that you can consider to achieve success in your youth.
- Types of Investment Based on Assets
The types of investments can be differentiated based on the type of assets used. In general, these investments can be divided into two main categories: real asset investments and financial asset investments.
- real assets Investment
Aktiva Riil investments involve physical assets that have intrinsic value. Examples of real asset investments include property, gold, and collectibles such as artwork or antique cars.
The advantage of real asset investments is that the value of the asset tends to be stable and can even increase over time, especially in the face of inflation. For example, property can provide returns through increases in the value of land and buildings as well as passive income from rent.
- Financial Asset Investment
In contrast, financial asset investments involve assets that have no physical form but have economic value, such as stocks, bonds and mutual funds. These investments are generally more liquid than real assets.
This means they are easier to sell or cash in. However, the risk in financial asset investments can be higher as their value fluctuates and is highly influenced by market conditions and the world economy.
- Types of Investment Based on Time Period
Investments can also be categorized based on the investment timeframe, namely short-term, medium-term, and long-term. Each type of investment has different characteristics and financial goals.
- Short-term Investments
Short-term investments are usually made in a period of less than one year. Examples of short-term investments are time deposits and certificates of deposit.
The advantage of short-term investments is high liquidity, allowing investors to quickly access their funds. However, the returns from these investments tend to be lower compared to long-term investments.
- Medium-Term Investments
Medium-term investments usually have a time horizon of between one to five years. Examples of medium-term investments include bonds and fixed income mutual funds.
Medium-term investments are suitable for those who have financial goals in the medium term, such as preparing funds for a child’s education or buying a vehicle. These investments offer a balance between risk and return.
- Long-term Investment
Long-term investments are made over a period of more than five years. Examples of long-term investments are stocks, property, and gold. These investments are suitable for long-term financial goals such as retirement funds or house purchases.
Long-term investments generally provide greater returns if done with careful planning. For example, gold is a long-term investment with minimal risk and promising returns because its value is proven to increase every year and is resistant to inflation.
- Examples of Investment Types
To better understand the examples of various types of investments to consider to achieve financial goals, you can refer to the respective discussions here.
- Stock Investments
Stocks are one of the most popular types of investments and are often considered an important part of an investment portfolio. By buying stocks, you have partial ownership of a company and are entitled to a share of the company’s profits, usually in the form of dividends.
- Mutual Fund Investment
Mutual funds are investment instruments where funds from various investors are pooled and managed by professional investment managers. This investment is suitable for those who want to diversify their investments without having to choose stocks or bonds individually.
Mutual funds also offer flexibility in terms of investment timeframe, as investors can choose mutual funds that suit their risk profile and financial goals.
- Deposit Investment
Deposits are one of the safest types of investments. It offers fixed interest paid periodically over a period of time.
Deposits are perfect for investors who seek stability and want to preserve their capital with minimal risk. However, the returns from time deposits tend to be lower compared to other types of investments.
- Bond Investment
Bonds are debt securities issued by companies or governments to raise funds. In return, the bond issuer promises to repay the principal and interest at a predetermined time.
Bonds are often considered a safer investment than stocks, especially if they are issued by reputable governments.
- Property Investment
Property investment is an example of a type of real asset investment that involves buying real estate, such as houses, apartments, or land. Property has the potential to benefit from value appreciation and passive income from rent.
Although the liquidity of property is not high and requires a large amount of initial capital and maintenance costs, property is a long-term investment that can provide significant returns.
- Types of Gold Investments
Gold is considered a safe haven asset because its value tends to be stable and resistant to inflation. Gold investment is perfect for those who seek protection against economic uncertainty.
In addition, gold is also included in real and financial asset investments because it has several types of investments that you can customize according to your needs, abilities, and future financial goals.
- Physical Gold Investment
Physical gold can be in the form of gold bars, coins, or jewelry. Physical gold investment is generally still in high demand among baby boomers and millennials. Physical gold transactions can only be done directly such as at gold shops or other physical gold providers.
Physical gold investment gives investors a sense of ownership because it has a form that can be held and used. For some people, physical gold can also have its own memorable value.
- Digital Gold Investment
Digital gold is a new means of investing virtually that can be done through a smartphone. This type of investment is perfect for young people who want to start investing.
Its virtual form makes digital gold investment transactions more flexible because it can be done anywhere and anytime and is safer in terms of storage.
You can also start investing from a small nominal because digital gold does not set a large capital to be able to own gold, making it more affordable for all people.
One of the digital gold investment platforms with affordable capital starting from Rp 5,000 that you can try is Treasury. Treasury is the first digital physical gold trader licensed by BAPPEBTI, registered with KOMINFO, partnered with ICH and member of ICDX.
So you don’t need to worry about the legality and safety of investing in gold at Treasury!
Understanding the different types of investments can be your first step towards achieving financial success in your youth. You will be able to build a strong and sustainable portfolio by choosing the type of investment that suits your financial goals.
It is important to always do research and consult with a financial expert before making investment decisions. You will be better prepared to face future financial challenges and achieve the desired success by understanding the types of investments.
