Investment has become increasingly popular lately. No wonder, investment promises us to gain huge profits in the future.
In the past, people invested in commodities. Traders bought grains from farmers during harvest season, then stored them and traded them with other goods they needed when they fulfilled their needs.
Then people began to recognize various types of metals and understood the value of different types of metals. For example, precious metals were used as jewelry.
As time went by, it turned out that the jewelry stored could increase its economic value with the increasing amount of commodities produced due to the expanding land area.
As time goes on, more and more people realize the importance of investing by exchanging perishable goods with timeless ones.
Gold But Not Gold
Since people realize the value of investing, they begin to seek assets that are not quickly outdated. One of them is precious metals, and the most traded one is gold.
Gold is valuable because it does not corrode easily, and it is biocompatible with the human body. Gold also has an attractive appearance and shine, making it more suitable for use in jewelry.
However, gold is the laziest asset. Gold itself does not have an underlying product/service to back it up, perhaps only giving benefits to gold traders and jewelry makers/artists.
In addition, the process of harvesting gold from nature requires effort that is not easy. Starting from mapping the position of gold to conditioning the surrounding community before mining gold.
Holding gold does offer the opportunity to get a return on our investment in the future. However, storing gold at home also has its own risks such as if its surface is slightly scratched, the price will also decline.
Stock Create Product and Service
One of the assets for investment is stocks. Stocks represent ownership in a company, whether traded publicly or privately.
Stocks reflect the company behind them. For example, Apple's stock reflects the technological revolution carried out by the company.
Stocks are assets that work hard compared to gold. Gold tends not to produce any innovation if you hold it.
Unlike gold, companies that produce innovation and serve the community have the potential to continue growing their market capitalization. This is what makes gold a lazy asset.
Holding stocks not only benefits investors, but also all employees within the company, not to mention loyal customers who are always waiting for the company to serve them.
Employing Billions Of People
The majority of people in the world rely on companies for their livelihoods, from investors, employees, to consumers who need their products.
The level of societal welfare has dramatically increased since capitalism was adopted by several developed countries, followed by developing countries.
Billions of people earn their income due to modern capitalism, ranging from young people looking for work to seniors investing their pension money.
Especially since the world shifted from gold currency to fiat currency. Since then, funding for economic growth has become easier because fiat money reflects a country's productivity, while gold currency is lazier.
In addition, by switching to fiat currency, it is easier for governments to collaborate with central banks to reduce unemployment rates. It also provides more flexibility to control inflation rates by managing the circulation of fiat money.
Return On Investment
The reason why people invest is to gain a lot of return on investment in the future. Therefore, we must be careful in managing our wealth.
It is better to avoid lazy assets to make our wealth multiply. For example, Tesla's market capitalization in 2010 was below 2 billion US dollars, while in 2022 it closed at over 350 billion USD.
In addition, Tesla reached the highest market capitalization of 1 trillion USD. This proves that investing in companies is the best way to make your money work hard.
Indeed, during times of uncertainty in the world, many people will turn to gold. This is because gold is the easiest asset to carry and everyone agrees that gold is a valuable metal.
In addition, investing in gold can be done by buying jewelry to please your wife without thinking about how much your money will multiply in the future. However, it is believed that making your wife happy can also bring blessings.
