Why investment is important?
The term investment is one that is used to designate the act by which an individual, a company or even a government decides to place part of its earnings or dividends in an activity that allows it to obtain long-term gains and to avoid that the capital is P Ierda or splurge. Investment is also understood as the expense that a State must carry out in different areas such as health or education and therefore it is not wasteful but something important and necessary for a population.
Investment is one of the simplest acts that can occur in the economy and hence its importance; Anyone who has a small amount of capital can invest it and look for that investment to obtain greater long-term gains. Investment is a serious decision that must be taken with time, sensibleness and correctness in the different elements to be evaluated because it can mean gains as well as losses or risks that can make the person return to zero. However, when it is well carried and planned, investment is always recommended because it represents a smart decision to place capital on something that can be productive in the future rather than splurging on it in a complete way. An example of an individual’s daily investment can be the obtaining of a car that, despite being a major expense, is decidedly an investment in the future because that product can be valued and also prevents the person to spend resources so Untidy and uncontrolled.
On the other hand, the term investment refers to the decisions that a State must carry out in respect of the way in which it manages the public revenues of a population. In this case, the investment is a political decision because when you put the money in some of the areas of government is limited the amount of money placed in others. A very clear example of this is when a state that is a world power decides to invest much of its monetary capital in the military industry to sustain that place of power by ceasing to invest in other areas such as social protection, health, education that must To remain in private hands and that make a large part of the population to pay for themselves those expenses. Another very different example is the one known as welfare state in which it is decided to invest and direct capital to the social areas such as education, health, work, housing, etc., in order to assure the population a high quality of life.