Very often, experts literally understand investments as a way to part with a significant amount of money in order to receive significant income in the future. All cash investments are usually subdivided into real and financial. In this article, we will consider in more detail such a type as real investment.
Definition
Real investment is some capital that is invested in tangible assets. The financial option is different in that it consists of contracts executed on paper (for example, bonds, stocks, etc.). The investor himself determines his goals and, based on them, chooses this or that policy. Of course, before making such a responsible decision, the investor should carry out significant preparatory work, which consists in drawing up a financial project, calculating possible risks, studying the
level of profitability. At the moment, experts believe that it is real investments that are stable, but their profitability does not always live up to expectations.
Forms of real investment:
- New product lines.
- Gradual expansion of output volumes or an increase in the range of goods.
- Creation of such working conditions under which the enterprise itself will bear slightly lower costs. The following parameters belong to this category: modernization of equipment, improvement of technological solutions, improvement of working conditions for employees, use of completely new materials. Such real investments are primarily aimed at improving the competitiveness of the entire enterprise as a whole, therefore, its market position will be slightly higher compared to other organizations.
- Financial investments necessary to create such a system of labor protection and environmental safety that will meet all regulatory requirements that currently exist in the territory of a country. The main task of this kind of investment is to satisfy the requirements and regulatory conditions that the state puts forward.
Real investment management. The main advantages and disadvantages
According to experts, real investments today are an investment in innovative equipment, technologies,
intangible assets, which will subsequently contribute to improving the work of employees, increasing sales, reducing the cost of goods, which, ultimately, always leads to an increase in investor income. The main drawback is considered to be an urgent need to study the market and all the attendant nuances that are directly related to the company. If you look on the other hand, then the full return on real investments (long-term) can only be obtained in a few years, but only if the climate is favorable from a financial point of view in the country.