Invest Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Invest, written in plain English, along with examples of how it is used.

What is Invest?

It refers to accumulating funds to buy assets like bonds, shares, property or to utilise those funds in a business with expectation of future profit. Gifts and loans are not considered as an investment

History and Meaning of Invest

The term "invest" originates from the Latin word "investire," which means to clothe or dress. In the financial context, it refers to the act of allocating money with the expectation of generating income or profit in the future. Investments can take many forms, such as buying stocks, real estate, commodities, or investing in a business venture.

Investing can be a useful way to grow wealth over time if done carefully and strategically. However, it always carries a degree of risk, and it is essential to conduct proper research and seek expert advice before making any investment decisions.

Examples of Invest

  1. John decided to invest $10,000 in the stock market with the hope of earning a profit.

  2. Sarah decided to invest in real estate by purchasing apartment buildings to rent out to tenants.

  3. Tom invested his savings in a start-up tech company that he believed had the potential to disrupt the industry.

Related Terms

  1. Return on Investment - a calculation used to determine the profitability of an investment over time.

  2. Capital Gains - the increase in the value of an asset, such as a stock or real estate, over time that results in a profit when sold.

  3. Diversification - spreading investments across different asset classes to mitigate risk.

  4. Portfolio - a collection of investments owned by an individual or organization.

  5. Securities - tradable financial assets, such as stocks or bonds, that are bought and sold on public exchanges.