Investment

Topic

Financial Literacy

Definition

Investment is the allocation of capital to an asset with the expectation of generating income or profit.

Description

Investing is essential for building wealth and achieving financial goals, allowing individuals and businesses to grow their capital. Understanding the principles of investment is crucial for effective financial planning. In real-world applications, investments include stocks, bonds, real estate, and other assets. Algebraically, the expected return on investment is calculated with various mathematical models, introducing students to concepts of risk and reward. A teacher might explain, "When you invest money, you're using it to buy something that you hope will grow in value over time, helping you save for the future."

For a complete collection of terms related to Financial Literacy click on this link: Financial Literacy Collection.