What Is Investment Meaning in Comparison to Savings?

What Is Investment Meaning in Comparison to Savings?

The question, ‘What is investment meaning?’ becomes crucial when asked about savings. 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 handinvestment 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.

When understanding ‘what is investment meaning,’ remember that there is a direct relation between returns and risk, meaning more significant the risk involved, higher are the chances of earning greater returns. That is why when you are identifying ‘what is investment meaning?’ for you, you must check the risk profile of different options and review your risk appetite.