Investment

Who needs this information?

This learning nugget is for anyone who is new to finance or new to investment. 

How to use this learning nugget?

This learning nugget will give you a bacis overview investment of businesses and startups. What to do with your money and how to investment to get more out of it. 

How long does the learning nugget take?

To read this learning nugget it will take approximitly 5 minutes. Additional material can be found on the bottom. This can be interesting for more specific information.

General Information

What is an investment?

• An investment is an asset or item acquired with the goal of generating income or appreciation. Appreciation refers to an increase in the value of an asset over time. When an individual purchases a good as an investment, the intent is not to consume the good but rather to use it in the future to create wealth.
• An investment always concerns the outlay of some capital today – time, effort, money, or an asset – in hopes of a greater payoff in the future than what was originally put in.
• An investment involves putting capital to use today in order to increase its value over time.
• An investment requires putting capital to work, in the form of time, money, effort, etc., in hopes of a greater payoff in the future that what was originally put in.
• An investment can refer to any medium or mechanism used for generating future income, including bonds, stocks, real estate property, or a business, among other examples.

Available for Investment

Understanding that investment can take many shapes enables businesses to take advantage of a variety of resources. Considering all available investment resources when developing a financial plan promotes optimal use of financial resources.

What resources can be invested?

• Time
• Physical assets
• Money

How to spend your startup’s initial investment?

One of the keys to spending wisely is in treating the money you have – no matter where it came from – like it’s your money. Bootstrappers often talk about the way spending your won hard-earned cash makes you rethink the quality of every investment. This is a healthy mindset toward investment.

Breakdown of how to spend the money you’ve got:

 1 million € or 10,000.

• Spend up to 20% on market research.
• At least 75% on building your minimum viable product
• Whatever is left over the rest of the stuff that seems important at the time.

Sources: Investopedia: Sharper insight, better investing., How to Spend Your Startup’s Initial Investment | Capterra