Capital Investment Definition: Capital Investment defined as the total expenses in a business or investment today primarily spend to operate, run or continue to its highest potential. Capital Investment also means the total amount of money you spend overall. It defined as the money allocated by a business owner or a corporation to meet the business or company’s objectives. Such expenses are money for machinery, man power, electricity, materials, supplies, tools, heavy equipment, etc yo enhance business objectives. Capital Investments are the primary thing a business will risk, then followed by other factors. The term capital investment also referred to the business spending, expenditures, and expenses to acquire or obtain long-term assets or properties such as buildings (real estate), manufacturing plants and machinery.
Major Examples of Capital Investment
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- land and buildings – capital investment required in real properties
- construction – also a business assets and acquisition
- improvements – of land or buildings
- land development – developing landscape, or land
- infrastructure – construction
- machineries – use in manufacture
- computing – data based informations of a business, or computing used for ICT
- vehicles – such as employees transportation service
- software development – more on business software to operate smoothly
- website development – to generate sales online, and use for online branding
- mobile apps – business will invest capital in mobile apps for his customers or target clients
- intellectual property – business ideas, trademarks and patents
- branding – business owners invest capital on branding by looking for professionals and experts about branding a certain product
- human resource workshops – businesses invest capital in human resource workshops, trainings, and seminars for professional growth and skills development
Capital Investment in Paper Assets
Stocks, mutual funds, even forex trading and binary options required capital investments. In stocks, your primary investments are the money spend overall when purchasing stocks including tax and charges.
Here’s a good example of capital investment in paper assets;
John Doe bought 10,000 Apple Stocks and 1,000 Google Stocks, Apple stocks price 116.87 USD per share while Google stock price is 1,585.99 USD per share.
- 10,000 X 116.87 = $1,168,700 X .1% ($11,687) charges, fees and tax = $1,180,387 capital investment for buying Apple Stocks shares
- 1,000 X 1,585.99 = 1,585,990 X .1% ($15,8599.9 charges, fees and tax = $1,601,8499 capital investment for buying Google Stocks shares
Now you know capital investment definition and I hope the examples can help you understand what is capital investment really is. Keep on learning more about trading and investing!