All About the Four ‘W’s and One ‘H’ in Investing 101

Investing 101

When it comes to investing, two meanings define finances. One pertains to economic interdependence in forming, distributing, and using limited resources based on using it while the other is the utilization, which allows further and improved production, according to Investing Money.


The former takes the perspective of a financier, while the latter takes on the point of a political strategist or economist. There are immaterial differences between the two. First, both portray purpose in their definitions. Second, both state the system of how finances are created and where they are sourced. Lastly, distributing finance, considered as a common product, and measuring the value of the income nationally.


The following items are the operational definition of terms in investing. Credit is borrowing in the face of cash or cash equivalents. This is availed by the borrower from the creditor with restrictions that he or she must return the money after a specified period in the future, with an additional amount called the interest. The terms credit and what we call loan are not exactly similar. Loan is defined by borrowing, but this doesn’t automatically pertain to credit because a loan may or may not charge interest. Furthermore, it can be lent from one person to another for a very short time.


The essential meaning of the sources of various economic funds is the art of having funds to finance operations. In this scope, we should remember the following: first is the width of the person’s level of understanding of the category of the economy of financing and investing. Second is establishing parameters in terms of the narrow and limited knowledge under more conventional meaning. Thirdly and lastly, establishing parameters of what funding cash and its monetary equivalent is.


There is no such thing as the term “investment” in earlier financial dictionaries. However, when the term is combined with the word policy, “investment policy” is already defined as the consolidation of financial and monetary decision-making. A brighter side of these discoursed meanings is to be able to connect both terms: capital investments and policies on investment. There is a development in the economy based on the primary directions. Second is that there are higher interest rates provided for eventual, economic growth. Last is increasing effectiveness and efficiency in the economy. This is measured by the following:


  1. Developing of discarding the national income and production in each lost Ruble;
  2. Fulfilling the incremental structure of financial investments;
  3. Ensuring an improved technological structure; and
  4. Maximizing the improved technological structure.


In Investing for Dummies, relative to the meaning of financial investments or placements, the meaning of the word “investment” in current dictionaries remains unchanged. Furthermore, there is no exact advancement of investments, succeeded by the right excuses. It is different from the expenses of that definition. Capital or financial investments are talked about as the costs for forming new, primary sources of funds and for expanding, reviving, and reestablishing active sources.


Aggregate investments of formulating an investment outlay are targeted towards keeping and expanding the primary capital or basic source. Aggregate investments are made up of two, separate parts. One is coined as depreciation. Depreciation is defined as the degradation of a certain asset’s value over time. This is the basic, new-to-old transition, or the wear and tear of the financial product. This does not require a cash outlay, however.


Real investments, on the other hand, are the placements in the financial or economical branches. Furthermore, those are types of activities in the economy that gives an opportunity or encouragement for the arrival of the capital measuring constant values and that means a higher value for both material and non-material capital or wealth – such servicing as an institution or the service of the redistribution of common wealth from a certain investor to another, with the exception of charity.


  1. less than 6 months is considered quick and compensative;
  2. period from half a year until 1.5 years is considered intermediate-termed compensative; and
  3. more than 1.5 years is considered long term and compensative form


We ceased at the meaning of the financial outlay investments in the work relating to what they call the “economical course” for a particular purpose, as, with it the writer attempted to explain the definition and context of investments systemically and thoroughly, in this publication.


In Investing 101, we need go back to the discourse about the meaning of the category of the term “investments” that is written in various and separate publications on the next chapter. What do you think are the conclusions that can be derived from the discourse and expanded discussion above?