An investment is an asset or item that is purchased with the aim of generating income or capital appreciation. Appreciation refers to an increase in the value of an asset over time. When a person buys a good as an investment, the intention is not to consume the good but to use it in the future to create wealth.
An investment always involves investing some capital — time, effort, money, or an asset — today in hopes of a greater return in the future than what was originally invested.
For example, an investor may buy a monetary asset now with the idea that the asset will generate income in the future or later be sold at a higher price for a profit.
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An investment uses capital today to increase its value over time.
Investing requires investing capital in the form of time, money, effort, etc. in hopes of a greater payoff in the future than what was initially invested.
An investment can refer to any medium or mechanism used to generate future income, including but not limited to bonds, stocks, real estate, or a company.
