Another one of the common objectives of investing money is to ensure that it grows into a sizable corpus over time. Capital appreciation is generally a long-term goal that helps people secure their financial future.
To make the money you earn grow into wealth, you need to consider investment objectives and options that offer a significant return on the initial amount invested. Some of the best investments to achieve growth include real estate, mutual funds, commodities, and equity. The risk associated with these options may be high, but the return is also generally significant. Investments can also help you earn a steady source of secondary or primary income.
Examples of such investments include fixed deposits that pay out regular interest or stocks of companies that pay investors dividends consistently. Income-generating investments can help you pay for your everyday expenses after you have retired. Alternatively, they can also act as excellent sources of supplementary income during your working years by providing you with additional money to meet outlays like college expenses or EMIs. Aside from capital growth or preservation, investors also have other compelling objectives for investment.
This motivation comes in the form of tax benefits offered by the Income Tax Act, This has the effect of reducing your taxable income, thereby bringing down your tax liability. Saving up for retirement is a necessity. It is essential to have a retirement fund you can fall back on in your golden years, because you may not be able to continue working forever. Investing can also help you achieve your short-term and long-term financial goals without too much stress or trouble. Some investment options, for instance, come with short lock-in periods and high liquidity.
These investments are ideal instruments to park your funds in if you wish to save up for short-term targets like funding home improvements or creating an emergency fund. Other investment options that come with a longer lock-in period are perfect for saving up for long-term goals. Ownership investments, as the name clearly suggests, are assets that are purchased and owned by the investor.
Examples of this kind of investment include stocks, real estate properties, and bullion, among others. Funding a business is also a kind of ownership investment. Corporate bonds, government bonds, and even savings accounts are all examples of lending investments.
The money you park in a savings account is basically a loan that you give the bank. This money is used by the bank to fund the loans it gives out to its customers. These are investments that are highly liquid and can easily be converted into cash.
Money market instruments, for instance, are excellent examples of cash equivalents. Cash equivalents generally offer low returns, but correspondingly, the risk associated with them is also negligible. Savings simply mean putting aside a part of your earnings over time. The saved amount of money is subject to no risk and, therefore, does not help you earn any profits or returns.
However, its value appreciation remains more or less stagnant, as there is no addition over and above what you add each month. On the other hand , investment definition is based on the concept of earning returns or profit on the money you first put in a fund or spent on an asset purchase.
Remember here that the involvement of risk is what makes them profitable. They hesitate to consider investment meaning for wealth creation because of the involvement of risk. However, many investments are also risk-free, and some carry only little to moderate risk.
At an early age, you have few responsibilities and, thus, have a better tendency to experiment with different investment and leverage those, which suit your requirements best. Medical Definition of invest.
Legal Definition of invest Entry 1 of 2. Legal Definition of invest Entry 2 of 2. Other Words from invest investor noun. Get Word of the Day daily email! Test Your Vocabulary. Test your knowledge - and maybe learn something along the way. Love words? Need even more definitions? Just between us: it's complicated. Ask the Editors 'Everyday' vs. Volunteers who are invested in the charitable project. The Constitution invests Congress with the power to make laws.
One of his first acts was to invest the emperor Charles VI. Invest it well and it might get her a couple of years, the way prices keep going up. I can understand you not wanting to invest the money for a car, but what's wrong with accepting a ride now and then? All rights reserved. Filters 0. Words form: invested investing invests. See word origin.
The definition of invest is to put valuable resources into something that you expect will give you a personal or financial gain. To install in office with ceremony. English American Business Examples Translations. Sign up for free and get access to exclusive content:. Free word lists and quizzes from Cambridge. Tools to create your own word lists and quizzes. Word lists shared by our community of dictionary fans. Sign up now or Log in. Definitions Clear explanations of natural written and spoken English.
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