When investing, you are buying a day that you don’t have to work.

Aya Laraya

Dictionary

Investing: Put (money) into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit.

Investing is defined as the “commitment of resources to achieve later benefits”. If an investment involves money, then it can be defined as a “commitment of money to receive more money later”. It is the action to grow one’s money over time. We purchase an asset to generate income or capital appreciation (a rise in value from what you forked out for it).

Investing is an effective way to put your money to work and potentially build wealth. Though not the primary reason, wise investing can allow your money to outpace inflation and increase in value. The growth potential of investing is primarily due to the power of compounding and the risk-return trade-off.

Capital has an opportunity cost attached to it. We can place it in low-risk-return vehicles like bonds or fixed interest rates or place it in high-risk-return opportunities like stocks or real estate.

An investment requires the outlay of some resource today like time, effort, money, or an asset; in hopes of a greater payoff in the future than what was originally put in.

Investing is such a diverse universe because we all have different needs, expectations, and appetites for risk. We also have different values, some unphased by the accumulation of wealth and others driven by it.

We tend to lean towards areas we either know well or that have been ingrained in us from our environment, culture and even the era we were born. You will have die-hard real estate fans, die-hard stock market fans and dare I say, crypto ambassadors. No one shoe fits all.

Investing does not just relate to money. We invest in our health in the hope of living longer or a better-quality life. We invest in our education in the hope of getting a better job and building a future career. We invest in better car tires to last the distance! I invest in my sons so that one day they don’t need me (that is an example of a high-risk-reward payoff).

Why people invest is unique to every individual but I do believe everyone should invest.

What do I think Investing means?

To me, investing is about fortifying my future and security for my family. I earn profit and allocate that to grow into more profit over time.

I am not necessarily focused on income-producing assets (although I do have them), I am focused on increasing net worth. So, I invest in vehicles with longer time frames and higher risk opportunities.

I am a believer in stewardship. Stewardship comes from the Greek word “oikonomia”, or economy, which means management of the house or household.

So, moving past the history lesson, Investing is a part of managing my household diligently. If I am fortunate to make money I want to invest that wisely to grow what I have been entrusted with.

What does investing mean to you?