Investing

Investing refers to the act of allocating resources, usually Money, with the expectation of generating an income or profit. It involves purchasing Assets, such as Stocks, Bonds, real estate, or other Securities, with the aim of growing wealth over time.

For instance, an individual might buy Shares of a company, expecting that the value of those Shares will increase, allowing them to sell for a profit in the future. Alternatively, a person may invest in real estate by purchasing rental properties, generating income through rent while also benefiting from potential property value appreciation.

Case Example: Consider an investor who purchases 100 Shares of Company XYZ at $10 per Share. If the company’s performance improves and the Share price rises to $15, the investor can sell the Shares for $1,500, realizing a profit of $500.

Another case involves a retirement account. An individual might contribute regularly to a 401(k) plan, investing in various funds. Over decades, the compounded growth of these investments can significantly increase the account’s value, providing financial security in retirement.