lesson 1 - reasons for investing Flashcards
(8 cards)
1
Q
what is investing?
A
spending money/resources to gain a profitable return in the future
2
Q
what is return?
A
the benefit or profit gained from an investment
3
Q
why do individuals invest?
A
- to grow wealth, achieve lifestyle goals, and secure financial future
4
Q
why do businesses invest?
A
- to increase profits, production of goods and service to profit to the owners of the business
eg. investing in technology, equipment, or workforce
5
Q
how do individuals fund investments?
A
- saving from income
- borrowing money
- superannuation
6
Q
how do businesses fund investments?
A
- reinvest profits
- borrow from banks
- issue shares on stock exchange like the ASX
- crowdfuning (eg. kickstarter)
7
Q
what is the ASX?
A
- marketplace that brings together companies and investors
- regulated by ASIC
- buy stocks online
8
Q
how does the ASX work?
A
- price of share determined through market forces of demand and supply
- can place a buy or sell order
- market value of a company = number of shares on issue x current share price
