What does investing involve?

Investing involves the allocation of resources to generate income or profit over time. This means that when individuals or institutions invest, they are directing capital into assets, projects, or ventures with the expectation that these will yield returns in the future. This can take many forms, such as purchasing stocks, bonds, real estate, or starting a business. The fundamental principle of investing is that the capital used will appreciate in value or generate income, contributing to the investor's overall wealth.

In contrast to simply saving, which focuses on setting aside money for future use without expecting it to grow significantly, investing is about making strategic decisions to grow wealth. The expectation of profit involves taking calculated risks, understanding market dynamics, and performing due diligence on the opportunities presented. This distinguishes investing from mere saving or spending.