Investment is a catch-all term for anything you buy or put your money into in order to generate a return over and above the amount committed. The most common forms are savings, shares and property, but some also invest in securities, currencies, commodities or collectables. Some savvy operators will even bet against their investments declining in value, so that anything lost through depreciation will be recovered (ideally plus a bit extra besides) by winning the bet!
The gross profit generated through any of these scenarios is called the return. The return, less any fees owed to brokers who may have organized the successful investment strategy on your behalf, is what you are left with alongside your original deposit.
Unless you are an expert at foretelling market trends, it is usually unwise to embark upon a significant program of investment without the help of an experienced broker, or service provider. Whilst they will charge you for their services, the theory is that what you will gain from their expertise will exceed your outlay on using their services.
The minimum that you can afford to invest and the amount of fees you are willing to pay will determine the types of investments that are right for you. While the return on investment (ROI) for venture capitalists is one of the highest, most big firms require high investment minimums. Getting involved with a consumer venture capital firm is a great way to get started, as they allow lower minimum investments and offer greater diversification.
Contrary to what some would appear to believe, investing is not a no-risk strategy for acquiring unearned wealth. It is, in fact, a form of gambling. Share prices, securities, commodities and any other investments can go down as well as up. Many experts offset this by spreading investments across a wide range of platforms, figuring that as most prices go up most of the time any “hit” will be offset by more numerous gains. Nevertheless, prices can and sometimes do go down en masse.
Sometimes investment capital needs to be committed for a set period of time, with penalties if it is withdrawn beforehand such as in the case of some savings accounts. In other instances the trick is in knowing when to buy and when to sell, and to act without hesitation when the moment arrives.