What is Investing? Investing Kya Hoti Hai? Investing Explained in Hindi

True Investing Academy

2 Apr 202302:10

Summary

TLDRInvesting involves purchasing assets that can generate more money in the future than what was initially spent. The profit or return is the difference between the selling price and the investment cost. For example, investing ₹10,000 and selling for ₹12,000 yields a 20% return. Common investments in India include stocks, bonds, real estate, and gold. Profits are earned either by selling at a higher price or by generating income, like rent. The success of investments depends on the type of asset and the investment duration, as different investments carry varying levels of risk and return.

Takeaways

💡 Investing is the act of buying something with the expectation that it will generate more money than the original cost in the future.
📈 The profit or return on investment is the amount by which the selling price exceeds the original investment cost.
💰 An example given is investing ₹10,000 and selling it for ₹12,000, resulting in a 20% return on investment.
🏦 People in India invest in various simple things such as the stock market, bonds, real estate, and gold, or even in a bank.
🔄 Profit from investment can occur in two ways: by selling the asset at a higher price or by earning income from the asset.
🏠 For instance, renting out a flat for ₹10,000 per month generates a monthly rental income, which is considered investment income.
📊 If the flat is sold after some years for more than the original purchase price, the increase in value is called capital appreciation.
🤔 The amount of profit from investments depends on what and for how long one invests.
⏳ Different types of investments have varying levels of risk and return, which is important to understand before investing.
🌐 The script encourages learning about all kinds of investments to make informed decisions.

Q & A

What does the term 'investing' mean in the context of the script?
-In the context of the script, 'investing' refers to the act of buying something with the expectation that it will generate more money than was spent on it in the future, thereby providing a return or profit on the initial investment.
What is the definition of 'profit' or 'return' on investment as per the script?
-Profit or return on investment is the additional money earned from selling an asset for more than its purchase price. For example, if one invests ₹10,000 and sells it for ₹12,000, they have made a 20% return because they earned a profit of ₹2,000, which is 20% of their initial investment.
What are the common investment avenues mentioned in the script for people in India?
-The script mentions common investment avenues such as the stock market, bonds, real estate, gold, and bank investments.
How can one make a profit from an investment according to the script?
-The script suggests two primary ways to make a profit from an investment: by selling the asset at a higher price than the purchase price, and by generating income from the asset, such as rent.
Can you provide an example of how investing in a flat can yield profit as mentioned in the script?
-An example given in the script is investing ₹2,000,000 in a flat and renting it out for ₹10,000 per month, generating a monthly rental income. Additionally, if the flat's value appreciates to ₹2,500,000 after a few years and is sold, the profit from the capital appreciation is also realized.
What is the term used in the script to describe the monthly rental income from an investment property?
-The script uses the term 'investment income' to describe the monthly rental income generated from an investment property.
What is 'capital appreciation' as per the script's explanation?
-Capital appreciation is the increase in the value of an asset over time. In the script, it is exemplified by the increase in the value of a flat from ₹2,000,000 to ₹2,500,000.
How does the script differentiate between the types of profit one can earn from investments?
-The script differentiates between 'investment income', which is the regular income generated from the investment, and 'capital appreciation', which is the profit earned from the increase in the asset's value when it is sold.
What factors determine how much money one can make from investments according to the script?
-The script states that the amount of money one can make from investments depends on the type of investment made and the duration for which the investment is held, as different investments have varying levels of risk and return.
Why is it important to understand the risks and returns associated with different types of investments as mentioned in the script?
-Understanding the risks and returns associated with different types of investments is important because it helps investors make informed decisions and manage their expectations regarding the potential profits and losses from their investments.
What is the script's suggestion on how to approach learning about various types of investments?
-The script suggests that one should learn about all types of investments one by one to gain a comprehensive understanding of each investment option.

Outlines

00:00

💹 Understanding Investment and Profit

This paragraph explains the concept of investing as purchasing assets that can be sold for more than their original cost, resulting in profit. It uses the example of investing ₹10,000 and selling it for ₹12,000 after a year, yielding a 20% return on investment. The paragraph also touches on various common investment avenues in India, such as the stock market, bonds, real estate, and gold, and emphasizes that profits can be made in two ways: by selling the asset at a higher price or by generating income from it, such as renting out a property. The importance of the type of investment and the duration of the investment is highlighted, as they determine the potential for profit and risk involved.

Mindmap

Keywords

💡Investing

Investing refers to the act of allocating resources, such as money, with the expectation of generating a profit or income. In the video's context, it is about buying something now that will be worth more in the future, thus allowing the investor to earn more money than the initial investment. An example from the script is investing ₹10000 and selling it later for ₹12000, which results in a 20% return on investment.

💡Profit

Profit is the financial gain realized when the amount earned from an investment or business activity exceeds the costs incurred. In the video, profit is illustrated as the difference between the initial investment and the selling price, such as making a ₹2000 profit on a ₹10000 investment, which represents a 20% return.

💡Return on Investment (ROI)

Return on Investment is a financial metric that measures the profit or loss generated from an investment relative to the initial cost of the investment. The script explains ROI with an example where an investment of ₹10000 yields a sale of ₹12000, indicating a 20% ROI since the profit (₹2000) is 20% of the initial investment.

💡Stock Market

The Stock Market is a platform where shares of publicly traded companies are bought and sold. It is one of the investment avenues mentioned in the script where people can invest their money with the hope of making a profit by buying low and selling high.

💡Bonds

Bonds are debt securities issued by entities such as corporations or governments to raise capital by borrowing from investors. They are another form of investment discussed in the script, offering a fixed interest rate in return for the loaned funds.

💡Real Estate

Real Estate refers to land, buildings, and other immovable property. In the script, investing in real estate is exemplified by purchasing a flat for ₹2,000,000 and renting it out for a monthly income, or eventually selling it for a higher price to make a profit.

💡Gold

Gold is a precious metal that is often considered a safe investment and a hedge against inflation. The script mentions gold as one of the common investment options in India where people invest with the expectation of its value appreciation over time.

💡Bank

A Bank is a financial institution that accepts deposits and channels the money into lending activities. In the context of the script, banks are mentioned as a place where people invest their money, possibly in fixed deposits or other financial products, to earn interest.

💡Rental Income

Rental Income is the money received from renting out a property or asset to another party. The script uses the example of renting a flat for ₹10,000 per month, which is considered a form of investment income.

💡Capital Appreciation

Capital Appreciation is the increase in the value of an asset over time. In the script, it is explained as the potential for the price of a flat to rise from the initial purchase price of ₹2,000,000 to ₹2,500,000, thus providing a profit when the asset is sold.

💡Risk and Return

Risk and Return are fundamental concepts in investing, where risk refers to the possibility of losing some or all of the original investment, while return is the profit or gain one expects to realize. The script highlights that different types of investments have varying levels of risk and potential returns, and the outcome depends on the investment choice and duration.

Highlights

Investing means buying something that can yield more money in the future than the amount spent on the purchase.

The profit or return from an investment is the additional money gained from selling the investment for more than the purchase price.

An example is given where a ₹10,000 investment yields a total of ₹12,000 after a year, resulting in a 20% return.

People in India invest in various simple things such as the stock market, bonds, real estate, gold, or banks.

Profit from investment can occur in two ways: selling the asset for more than the purchase price or earning income from the asset.

An example of earning profit by renting out a flat purchased for ₹2,000,000 and receiving a monthly rent of ₹10,000.

Capital appreciation is the increase in the value of the purchased asset, such as a flat's price rising from ₹20,000,000 to ₹25,000,000.

Investment income refers to the regular income received from an investment, like the monthly rent from the flat.

The profit from investments depends on the type of investment and the duration for which it is held.

Different types of investments carry different levels of risk and return.

The transcript aims to educate listeners about the various aspects of investing and the potential for profit.

Investment decisions should consider the potential for both capital appreciation and income generation.

The importance of understanding the market and the asset's potential for growth is emphasized.

Investors are encouraged to diversify their investments to manage risk.

The transcript provides a basic understanding of how investments can lead to financial growth.

It is important to research and choose investments wisely to maximize returns.

The transcript may serve as a guide for beginners looking to start investing.

The speaker discusses the potential of real estate as an investment option.

The concept of compounding returns through reinvestment of profits is briefly touched upon.