Business Investment

Business is “an activity someone is engaged in”; investment is a certain amount of time, or energy or material resources a person uses up on a business. A person may use up time, effort and money to help victims of a calamity; the act of investing resources in the business of helping calamity victims ends when the target victims had received programmed assistance or when invested resources are exhausted.

Expending time, effort and resources in an activity that is meant to gain profit is another kind of business investment. In a profit-oriented business, the investments are not meant to be consumed but to be expanded; investments are goods that are exchanged for other goods. There are basically two kinds of goods you can invest in- goods that you need to consume to satisfy a certain need (e.g., food, clothing, medicine) or goods to produce other goods or tools (e.g.,fish net,ax, plow,steel mill).

In a profit-oriented business, you buy consumption goods and sell them at a higher price to receive a return on your investment The more times you can replicate the cycle of buying and selling at a higher price, the more return on investment you will accumulate.

Another way of expanding investment is by purchasing goods that produce other goods. You buy a fish net to catch fish and sell the fish you catch; the more fish you catch and sell, the more will be the return in your investment. The faster you can repeat the catch and sell cycle, the faster you are able to accumulate return on your investment.

Therefore, the faster is the turn-over of your investment, the faster you will accumulate resources that can be reinvested called capital. Capital accumulation is the goal of investing in a profit-oriented business. Put all together the profit-oriented businesses in a community and you will have a capitalist economic system in that community. Put a government system and citizens in that community and you will have a social system with a capitalist economy.

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