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Investment

An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed 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 appreciate and be sold at a higher price.

Notes:

The building of a factory used to produce goods and the investment one makes by going to college or university are both examples of investments in the economic sense.

In the financial sense investments include the purchase of bonds, stocks or real estate property.

Be sure not to get 'making an investment' and 'speculating' confused. Investing usually involves the creation of wealth whereas speculating is often a zero-sum game wealth is not created. Although speculators are often making informed decisions, speculation cannot usually be categorized as traditional investing.

See also: Appreciation, Asset, Bond, Investing, Investment Club, Real Estate, Speculation, Stock, Zero-Sum Game

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Investment

The creation of more money through the use of capital.

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investment

1. Property acquired for the purpose of producing income for its owner. Just as plants and equipment are investments for manufacturers, stocks and bonds are investments for individuals.

2. Expenditures made for income-producing assets.