Definition: Investment: An investment is a financial arrangement by which an individual, corporation or business attempts to earn a profit through the acquisition of assets and the utilization of those assets for the benefit of others.
The term can also refer to the process of making or engaging in the acquisition, creation, ownership, management, maintenance, or other actions or transactions involving capital stock. Investment is often used interchangeably with borrowing, which involves the use of money to acquire property or other financial resources without putting an equal and substantial return on that investment.
For example:
- Investment in stocks refers to purchasing shares in a company.
- Investment in bonds refers to investing in long-term debt securities.
- Investment in real estate refers to buying a piece of land for future development.
The definition of 'investments' is broad, but it can be divided into several categories based on their purpose and scope. Some examples include:
1.
Capital Accumulation
: It involves the acquisition of assets or investments that will contribute to an individual's financial stability.
2.
Financial Investments
: These involve the use of capital to invest in securities, such as stocks, bonds, or other types of financial instruments.
3.
Investments In Assets
: This category includes any form of investment where the investment is made with a purpose for its own value, rather than just for its potential return on investment.
The term "investment" can be used more broadly to refer to any action or transaction involving the acquisition or use of resources, and it often reflects the broader concept of financial management.
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