Let Your Money Grow.
Definition of ‘Investment’
It’s an asset or item that is purchased with the hope that it will generate income or appreciate in the future i.e. an investment is the purchase of goods that are not consumed today but are used in the future to create wealth or appreciate and can be sold at a higher price. Investing is using your money to buy financial assets such as land, real estate, business, retail shop/wholesale, shares or bonds and investing in income-earning enterprises to increase the assets future value.
Investment involves:
- Putting your savings to work for your money to grow. This means that you make your money available to be put into some ventures and thereby benefit from the profits from those ventures.
- Spending your money in ways that increase your earning ability in future.
- Foregoing today’s consumption for an activity that will bring you more income in future
Investment can be short term i.e. brings returns (income) soon, medium-term investments that take some years before one can earn from them and long term investments that require a lot of money and take longer to bring in returns. The advantage of long-term investments is that over time, they increase in value. This means if you have the right investment, your wealth would increase in the future! The opposite is also true, especially if you make the wrong investment.