What is investing & how does it work?

Investing involves putting your money to work by buying assets — such as stocks or bonds — to generate profits (often called returns) beyond your initial investment. When speaking about investing, people often refer to financial markets where investors connect to buy and sell assets, such as stocks or bonds.

How do you invest?

Brokerage and retirement accounts are two of the most common ways individuals invest. Our experts answer readers' investing questions and write unbiased product reviews ( here's how we assess investing products ). Paid non-client promotion: In some cases, we receive a commission from our partners. Our opinions are always our own.

Why is investing a good idea?

Investing is to grow one's money over time. The expectation of a positive return in the form of income or price appreciation with statistical significance is the core premise of investing. The spectrum of assets in which one can invest and earn a return is a very wide one.

What types of investments can a person invest in?

One can invest in many types of endeavors (either directly or indirectly) such as using money to start a business, or in assets such as purchasing real estate in hopes of generating rental income and/or reselling it later at a higher price.