1.

“Love yourself first and everything else falls into

line. You really have to love yourself to get any-
thing done in this world.” — Lucille Ball

Investment
By JAMES CHEN
Updated Jun 30, 2019
What Is an Investment?
An investment is an asset or item acquired with the goal of
generating income or appreciation. In an economic sense,
an investment is the purchase of goods that are not con-
sumed today but are used in the future to create wealth. In
finance, an investment is a monetary asset purchased with
the idea that the asset will provide income in the future or
will later be sold at a higher price for a profit.

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An investment always concerns the outlay of some asset to-
day (time, money, effort, etc.) in hopes of a greater payoff in
the future than what was originally put in.

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1:35
What's an Investment?
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Understanding Investment
Investing is putting money to work to start or expand a pro-
ject - or to purchase an asset or interest - where those funds
are then put to work, with the goal to income and increased
value over time. The term "investment" can refer to any
mechanism used for generating future income. In the finan-
cial sense, this includes the purchase of bonds, stocks or
real estate property among several others. Additionally, a
constructed building or other facility used to produce goods
can be seen as an investment. The production of goods re-
quired to produce other goods may also be seen as invest-
ing.

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Taking an action in the hopes of raising future revenue can

also be considered an investment. For example, when
choosing to pursue additional education, the goal is often to
increase knowledge and improve skills in the hopes of ulti-
mately producing more income. This is also the main goal of
reading articles on Investopedia. Because investing is ori-
ented toward future growth or income, there is risk associ-
ated with the investment in the case that it does not pan out
or falls short. For instance, investing in a company that ends
up going bankrupt or a project that fails. This is what sepa-
rates investing from saving - saving is accumulating money
for future use that is not at risk, while investment is putting
money to work for future gain and entails some risk.

KEY TAKEAWAYS
• Investment is the act of putting money to work to start
or expand a business or project or the purchase of an
asset, with the goal of earning income or capital appre-
ciation.
• Investment is oriented toward future returns, and thus
entails some degree of risk.
• Common forms of investment include financial markets
(e.g. stocks and bonds), credit (e.g. loans or bonds),
assets (e.g. commodities or artwork), and real estate.