An investment is an item, property, product or, any other asset which is purchased to generate income in the future. An investment can be any type of purchase such as stock, property, business, etc. The main objective is an appreciation of the value of the purchased asset. Appreciation means an increase in value. The invested asset is mostly not consumed but kept to create future wealth. Investments are categorized majorly into three sectors:
- Ownership Investments: Include stocks, real estate, investing in a business.
- Lending Investments: Include savings accounts, corporate bonds, government bonds.
- Cash Equivalents: Include money market instruments.