Investing is when you acquire something you think will increase in value or will pay you a regular income.
The things you invest in are known as ‘assets’. Typically these are shares in companies. Other types of assets include property, bonds, gold, cryptocurrency, art and other collectibles.
Investors use their cash (and sometimes their time and energy) to acquire assets they believe will increase in value in the future. When they sell the asset for more than they paid, they make a profit.
Other investors prefer assets that generate a regular income, such as rent from a property or dividend payments from shares.
What you invest in depends on the outcomes you want to achieve and the level of risk you’re prepared to take. Many people have invested in cryptocurrencies to try and make a fast profit. Others focus on dividend shares to help fund their lifestyles.
Next step: Find out about the simplest way to start investing.
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