We will discuss the “investment industry” through a whole series, that is, who will follow us, will learn the first meaning of “economics and stock exchange”, and how to enter the world of stock exchange and foreign exchange and make a profit.
We start the series with the first episode: “The Entrance to the Investment World”.
One of us works to raise money, profits and a decent life in order to protect ourselves and our children. But have you ever wondered where we get that money from?
Yes, the problem is simple. We exchange this money for the work we do for others (company, government work, performing a task), and we exchange this money for our basic needs, but we may spend some of it less than we get, and there will be extra money, so it’s called “savings“, and when One of us seeing that he has collected some extra money, which is “savings”, begins to think about getting a return on those savings, this is called “investment“.
For anyone who needs to implement a particular project idea to make money behind it, they must have enough funds to complete the project.
If he does not have enough money, he will present the vision to the owner of the money (those who have money to invest), but in your calculations, the person who gave you money must want to take it back to increase (the return of the project) .. great, now you have an idea to finance a project, You can now start your own business.
But how much time have you wasted making money?
A lot of time is wasted … But there are many ways to save time wasted in the search for money, these methods connect the owner of the fund with the owner of the project idea (the person who is looking for money), this is called the “financial system”.
The financial system helps connect savers with money to invest with consumers who need it. In the financial system, the financial services industry provides depositors and consumers with a range of products and services and helps them direct money between them.
Financial Assets: These are defined as claims on physical or other financial assets. A portion of the stock may represent ownership of the company. This is to give the owners (shareholders) some assets and profits for the company.
Financial assets that can be traded are called securities, and the two largest types of securities are debt securities and equity securities.
Investors who buy shares, also known as stocks, expect to be able to sell their shares at a higher price than they bought them, possibly through a dividend in return.
They are the place where the buyer (investor) meets and deals with the seller. The seller’s trading securities are known as stock market or stock market.
Financial intermediaries play an important role in the financial services industry, and financial intermediaries can play a role that investors cannot play on their own.
- Direct Financing:
Providers and users of capital can interact through financial markets or financial intermediaries.
The flow of funds through financial markets is referred to as “direct financing” because the providers of funds have direct demands from the users of their funds:
If you own shares in Vodafone, you have rights to Vodafone’s assets and profits.
- Indirect financing:
Providers and users of funds often rely on financial intermediaries to find and transfer funds between themselves. Because financial intermediaries act as intermediaries between savers and consumers.
Many savers do not have the time or experience, and once they lend money to the saver, they have to monitor the borrower’s behavior and financial situation to make sure the money comes back.