An asset or object purchased with the intention of generating income or appreciation is referred to as an investment. The term “appreciation” describes a rise in an asset’s worth over time. When a person buys a product as an investment, they don’t intend to utilize it immediately; instead, they plan to use it to make money later.

You may earn money from investments in one of two ways. One is the possibility of making a profit if you invest in a sellable asset. Second, you will generate income through the buildup of assets if you invest in a profit plan. In this context, the question “what is an investment” can be answered by stating that investments are all about investing your funds in assets or things that increase in value over time or that will help generate income.