Debt Dictionary


Investment Dictionary -> Investment

Invest refers to the term "vestis" which comes from Latin. This relates to placing money or cash into the pockets of other persons.
Investing refers to a term covering several interrelated meanings that find applications in the fields of economics, finance, and business planning and coordination (management). These meanings refer to saving and postponing consumption. Investing involves redirection of various resources. An unprofitable option is to consume them immediately. Instead, one can use them to build up benefits at some future period. In other words, the investor uses his assets in order to earn a profit. Investment differs from speculation with regard to the thorough analysis that precedes and accompanies the investment decision.

Investing in something or in someone is a decision, made by a person or a business entity. Investments that carry low risk and offer the opportunity of generating returns can be made in a pension fund, in a vehicle, property, stock securities, bond, etc.

The term "investment" covers different assets in the fields of economics and finance. Economists focus on real investments in vehicles, real estates, equipment, or inventory. Financial economists concentrate on financial assets or products, such as bank deposits, or other financial resources that can serve for the purchase of real assets.

In general, individuals employ the available goods or their cash equivalent with the aim of producing a sound good or service. An alternative will be to lend the original good or cash to another person or business entity in return for interest or a share in the profits.

An asset is typically purchased. However, an equivalent deposit may be placed in the bank in order to receive a return or interest over this amount in the future. In general, investment refers to the use of money with the aim of earning profits.

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