Investors aim to make money and build wealth over time through the practise of investing. There are a variety of ways to generate future income, and an investment can be defined as any of these methods. Investing in securities, such as bonds or stocks, or real estate, is one example. Investing in a property which can be turned into a manufacturing facility is also a form of financial planning.
To put it another way, any action taken in the hopes of generating future profits can be considered investment in and of itself. Increased knowledge and improved skills are two common reasons for pursuing additional education.
There is always a degree of risk associated with an investment because it is based on potential for future growth or income. It’s possible that an investment won’t bring in any money at all, or that it will actually lose value over time. There’s a chance you’ll invest in company that goes out of business or project that never comes to fruition. To put it simply, saving is putting money away for the future with no risk, whereas investing is putting money to use in the hopes of making money in the future with some risk.
