What Actually Is an "Investment"?

1. Land and the Structures That Reside on Them (Real Estate)

Real estate is a broad term that refers to any property owned by an individual or company. This can include homes, offices, warehouses, factories, farms, and more. Real estate can also refer to land itself and any structures that reside on it (such as homes). Real estate has been an essential part of economies worldwide since humans settled down permanently in one place instead of constantly moving around. There are five main real estate categories: residential, commercial, industrial, raw land, and special use.

2. Raw Materials and Primary Agricultural Products (Commodities)

A raw material is an intermediate product that is used in the manufacturing of finished goods. Raw materials are also known as primary agricultural products, commodities, and primary goods. The term "raw material" covers many products but generally includes bulk materials such as iron ore, steel, and petroleum.

Commodities are often regarded as physical materials such as metals and minerals, but they can also include some services. A commodity can be classified as a good or service naturally produced in large quantities by many firms in an economy. Commodity markets exist for goods such as oil and gas, grains, precious metals, and other basic needs of human beings.

3. Groups of People Working Towards a Specific Goals (Businesses)

When you invest in a business, you're putting your money into an enterprise where people work towards a specific goal. The idea is that if the business does well, then everyone involved will benefit from it. If it doesn't do well or goes bankrupt, you lose all or part of your investment. The money you put into a business isn't just a loan. You're also buying shares in that company and becoming an owner. Your investment gives you a stake in the company's future, so if it does well, you can share in its profits. If it doesn't do well or goes under, you'll lose all or part of your investment.

4. Finished Products Which Have Value (Tangible Assets)

Finite products are “tangible” assets: they have a physical existence and are not intangible. They can be touched and seen, although they may need to be maintained and repaired.

A person who has finished goods has a completed product ready for sale. This can be done on a small scale by an individual or on a large scale by a company. The difference between the two is that the individual will not usually have the resources to store or sell their products.

5. Knowledge, Brand Name, Patents, and Copyrights (Intangible Assets)

Intangible Assets are non-cash assets that cannot be touched or seen. They are not physical in nature and cannot be sold physically. Examples of intangible assets include patents, copyrights, trademarks, brand names, trade secrets, and goodwill. These assets are typically recorded on the balance sheet as an asset.

6. Individuals With Willingness and Ability to Repay (Loans to People)

The term "individuals with willingness and ability to repay" refers to a borrower's creditworthiness. A borrower with a history of repaying loans on time is more likely to repay their new loan. Borrowers who have had trouble repaying may not qualify for a personal loan.

If you do not have any existing loans, your credit score will be used by lenders to determine whether they are willing to extend your credit. If your credit score is low because of late payments or other issues, you may find it challenging to obtain a new loan. However, if you maintain good credit and pay off your debts on time, lenders will be more likely to extend your credit.

7. The Future of Your Government

The government bond market is a crucial component of the U.S. economy and an essential indicator of economic health. It's also one of the most misunderstood aspects of our financial system.

Bonds are debt instruments issued by governments, companies, and other entities that pay interest regularly. The payments are made to investors who have purchased the bonds.