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Investment
Putting money into something you expect to grow or pay you over time, accepting that you might also lose some of it.
Example
You put $200 of birthday money into a fund that holds shares of many companies. Over five years it grows to $260. You did nothing during those five years except leave it there. The growth came from the companies the fund owned doing well overall.
How it fits in
Investment trades certainty today for the chance of more tomorrow. Common categories include stocks, bonds, real estate, and ownership in private businesses. Two questions count for every investment. What is the realistic range of outcomes? And how long must you leave the money in for it to behave like the long-run average?
Where this is taught
Practise it on the platform
Related terms
When the money you earn from saving starts earning its own money on top.
Interest paid only on the original amount, never on the interest you have already earned.
Needs are the things that keep you safe and well. Wants make life nicer. Mixing them up is what empties most budgets.