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Real investments – are investments in tangible assets, such as real estate, capital goods, equipment, machinery, land, jewelry and art objects of antique or collectible value, etc.

 

Real investments in public facilities

It is also possible to invest in not only private objects but also in public facilities, including the building of educational and health institutions, road facilities, etc. At the same time investment in these types of facilities should be assessed and measured.

 

Real investment is a good option for:

  • business owners and part-owners who invest in its development
  • corporations, foundations and the very large individual investors, who work under a public-private partnership
  • those who want to lay the foundation of the family fortune and leave a legacy for future generations
  • very conservative investors, who do not trust the financial markets and are not ready to invest in something vague, even if it will generate large profits in the long run

 

Advantages of real investment

  1. Real investment in capital goods promotes the development of business and industry and has a positive impact on the state economy as a whole.
  2. Before an investment – a purchase of an asset- it is possible to examine, evaluate or test it, which reduces the possibility of fraud to some extent.
  3. General investment risks in case of real investment are lower than in the financial investment.

 

Disadvantages of real investment

  1. It is difficult to receive the investment income with dispatch. The acquired property, land or work of art can rise in price to a level that can create sufficient difference from the purchase price of the asset only in the long run.
  2. Real investment assets have very low liquidity, while operational resale and diversification of investments in this case is impossible.
  3. If you leave out the investments in expansion and improvement of capital goods by business owners and part-owners, the total revenue on real investments in comparison with the financial and speculative would be low.
  4. An investment asset may require additional investments in its modernization, maintenance, reconstruction, etc.
  5. The actual investment assets are at high risk of destruction, damage, amortization and obsolescence.

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