Tuesday, November 2, 2010

7:2 Capital Investment

Where and when did I find this word?
I found this word in a Business Math textbook in a chapter on insurance and investments.  This word was in a section of the chapter dealing with the rate of return on real estate.  This chapter teaches students about buying a home and the expenses that come with that purchase.  It also teaches students how to compare loans and other mortgage products.

What does this word mean?
According the the author of the textbook, capital investment is the amount of cash you originally invested in the property plus anything you spend for improvements that added value to that property.

What is my familiarity with this word?
I have come across this word many times.  I have seen it in my business textbooks, in financial newspaper and online articles.  I recently started looking into buying a home and once again I have run into this word.

Do I want to know this word and why?
I absolutely want to know this word.  First, as a teacher of financial and business education, it is important that I know as many related terms as possible.  It is not good enough to just know these terms but to know these words really well and how they react with each other.  Second, as a consumer of financial products such as mortgage notes and insurance, it is very important to understand the discourse of the financial community.

Do I want others to know this word?
I think that everybody should know this word.  A capital investment is one that most consumers will make in their lifetime,so to be aware of the terminology used in making that investment/purchase is important.

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