Investing

Committing money today with the expectation of more money later, in exchange for taking on risk and giving up the ability to spend that money now.

Example

Buying shares in a company instead of spending the cash on a holiday.

Important

Investing is not saving. Saving preserves money; investing risks it in pursuit of growth.

Related terms

• Asset — Anything you own that is expected to hold or produce value - a share, a bond, a property, a business.
• Return — The gain or loss on an investment, usually expressed as a percentage of what was put in.
• Risk — The chance that an investment's actual outcome differs from what you expected, in either direction.

Lessons that explain it

• What investing actually is — Investing is putting money at risk today in exchange for more of it later. Everything else in this Academy is detail on top of that one trade. (9 min)

All 578 terms in the Investing glossary