To invest is simply to put money into an investment with the intention of seeing a return/profit in the near future. Simply put, to invest simply means that you are buying an asset or something with the intention of making a profit from your investment through the appreciation or an increase in value of that asset over some period of time. There are two ways that you can make money from your investment: one is by selling it and the other by borrowing the amount that you invested. The best way to make the most out of your investment is to do both.
Most people prefer to invest in fixed interest investments. This is because such investments earn higher returns at relatively lower risk. Some common fixed interest investments are in bonds, mutual funds, money market accounts, and savings accounts. A bond is a particular kind of fixed interest investment wherein the issuer of the bond promises to pay the principal and interest on a regular basis i.e. at a fixed rate until some specified amount of time.
For mutual funds, a company issues shares of the company’s stock for an agreed commission and there is also a discount for early sales. Money market accounts are those accounts that trade solely on US securities i.e. the stocks and bonds. The advantage of saving on the commissions for these investments is the possibility to accumulate larger amounts of money over a longer term as you earn higher returns per unit of investment. On the other hand, the most widely used investment technique to make the largest profit is borrowing. This makes the most out of capital appreciation as you borrow what you don’t own and earn the interest on the borrowed amount.