What Is the Meaning of Investments?

Function

• Investing is among the primary ways individuals build wealth. Holding money does not increase the value of the money or earn a return. Investing money in an asset that may potentially increase in value over time uses uses money to generate more money.

Types

• Common types of investments include real estate purchases, improvements to homes and other property, and the purchase of stocks, mutual funds or other securities.

Potential

• Common improvements that might increase the value of a home include updates to the kitchen or bathrooms, the addition of rooms, deck or a garage, and the paving of a driveway.

Considerations

• Almost anything that requires expenditure to gain something in the future may be considered an investment. For instance, going out to lunch with your boss once a week might is an investment if you do it because you think it will increase the chances of getting a promotion.