Capital Investments 101

Capital investments refer to the amount of money that you have put into something like a business or a project. Usually this refers to money that you have invested in business or assets like real estate. To invest properly is to put money into something with the hope of seeing a profit / return in the near future. Simply put, to invest properly means that you own an asset or some asset with the intention of making a profit or an increase in the overall value of the asset through some period of time.

There are many types of capital investments. Some common types of capital investments are short-term investments like mortgages and personal loans. These kinds of capital investments are usually made with the intention of growing the money in them over a relatively short period of time – say a few months or a year. This is not the same as an investment in long-term assets like real estate or raw land. Real estate usually requires some rental or leasing revenue for it to grow, while raw land will need to have some underlying production such as crops or other underlying physical resources that can be exploited.

Capital investments can also be made in stock markets and in securities like bonds and mutual funds. Capital growth is the expansion of existing assets (like inventory, plant, buildings, etc) and the creation of new assets (such as software, information technology, innovations, etc). The difference between these two is that in stock markets investors are gambling; they are “playing the game” by purchasing shares of stock that will hopefully increase in price in the hopes of making a profit. Intangible assets on the other hand are not purchased or sold for their value but rather for their potential value as a company with a solid business plan and a good management team.