An investment is simply a financial instrument formed with the aim of allowing economy to grow. The money gained could be used for variety of purposes, including bridging income gaps, saving for retirement, and satisfying specific commitments like debt repayment, tuition fees, or the acquisition of other assets.
Understand the investment concept is critical since selecting the correct instruments to meet your financial objectives can be tricky at times Understanding what an investment implies in your specific financial situation will assist you in making the best choices.
You can earn money from your investment in two ways. One, if you invest in the tradable asset, you may be able to profit from it. Second, you will make money by accumulating gains if you invest in the return-generating plan. In this view, ‘what is investment’ can be defined as the process of investing your money in assets or items that will grow in value over time or that will generate an income.
In financial terms, an investment is an asset purchased with the intention of increasing in value over time. Investments are divided into three categories, as shown below.