Investing
Allocating money to assets with the expectation of generating future income or profit.
What is Investing?
Investing is the process of allocating capital — money or other resources — to assets with the expectation of generating income or profit over time. Unlike saving, which preserves capital in low-risk instruments, investing accepts some degree of risk in exchange for the potential for higher returns. Common investment vehicles include stocks, bonds, real estate, and funds. The fundamental principle underlying investing is the time value of money: a dollar invested today has the potential to grow significantly over time through compounding returns, making early and consistent investing one of the most powerful tools for long-term wealth creation.
Example
An investor who contributes $500 per month to a diversified stock index fund starting at age 25 could accumulate over $1.5 million by age 65 (assuming an 8% average annual return). The same investment starting at age 35 would yield approximately $680,000 — less than half — demonstrating the powerful impact of time and compounding on investment outcomes.
Source: SEC — Investor Education