What are real investments?

Very often under the investment of specialistsliterally understand the way to part with a large sum of money in order to get a substantial income in the future. All monetary investments are conventionally divided into real and financial. In this article, we will consider in more detail such a type as real investment.

Definition

Real investment is some kind of capital,which is invested in tangible assets. The financial option is different in that it represents contracts drawn up on paper (for example, bonds, shares, etc.). The investor himself determines his goals and, on the basis of them, chooses one or another policy. Undoubtedly, before making such a responsible decision, the investor should make 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 meet expectations.

Forms of real investment:

- New product lines.

- Gradual expansion of output volumes of products or increase in the range of goods.

- Creation of such working conditions, in whichthe enterprise itself will bear a slightly lower cost. This category includes the following parameters: 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 increasing the competitiveness of the whole enterprise, therefore, its position in the market will be slightly higher compared to other organizations.

- Financial investments needed to createsuch a system of labor protection and environmental safety, which will meet all the regulatory requirements that currently exist in the territory of any country. The main objective of this kind of investment is to meet those requirements and regulatory conditions that the state puts forward.

Management of real investments. Main advantages and disadvantages

According to specialists, today realinvestment is the investment of finance in innovative equipment, technology, intangible assets, which will subsequently improve the work of employees, increase sales, reduce the cost of goods, which ultimately leads to an increase in the income of the investor. The main drawback is considered to be an urgent need to study the market and all related nuances that are directly related to the company's activities. If you look at the other side, the profit from real investments (long-term ones) can be fully obtained only after a few years, but only on condition that the climate is favorable from the financial point of view in the country.