Investing creates wealth and wealth is a driver of consumption. More wealth means more consumption, while less wealth leads to less consumption. Thus all the three, i.e. investment, wealth, and consumption are interrelated. This creates an investment cycle.
INVESTMENT CREATES WEALTH; WEALTH LEADS to CONSUMPTION.
An investment could further be classified as:
- Financial Investment.
- Non-Financial Investment.
Financial Investments are investments in paper securities like:
- Cash and cash equivalent.
- Equity shares.
- Mutual funds.
Nonfinancial investments are investments in:
- Land and building.
- Plant and machinery.
- Business, etc.
With changing investment styles and investors seeking more diversification of wealth, real estates, precious metals, and arts are now a part of the investment portfolio of an individual.