What Is Capital? Definition, Types, Example

If you want to expand a business, you’ll need capital. Capital refers to almost any asset that can be used to produce future value. It includes tangible assets, like cash, machinery, equipment, and financial securities. But it also includes intangible property, like data, copyrights, patents, and even goodwill.

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a graphic defining the term capital analysis — Image source: The Motley Fool

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Entrepreneur

Entrepreneurs are innovators who seek to change their industry in some significant way rather than simply service an existing customer base.

In economics, capital – along with land, labor, and entrepreneurship -- is one of the four factors of production, which are essentially the building blocks of an economy.

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Vanguard Growth ETF (VUG)

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What Is Inflation?

Yes, it means rising prices and more, but what causes it, and why is it important to understand?

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Interest Rate

An interest rate is the cost of borrowing money or the premium you get for lending money. Learn how interest rates affect the economy.

You use the financial capital to build manufactured capital, i.e., the building and equipment that allows you to produce more of the goods you sell. But you also benefit from other types of capital, including the human capital that the workers bring to their jobs that allows them to be productive.

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About the Author

Robin Hartill, CFP, is a contributing writer at The Motley Fool. Robin’s work has also been published by Yahoo Finance, USA Today, and Penny Hoarder. She is a graduate of the University of Florida.

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