An investment is an asset purchased by an individual or organization with the expectation that it will increase in value over time. This could happen by accumulating interest or earning profits. Examples of investments can include stocks, ETFs, and real estate.

Investing vs. Saving

Investing is different from saving because it involves risk.

1. When you invest, there is a possibility that you may not achieve your goals, and due to self-induced factors, external ones, or a combination of both, you might lose your money instead of growing it. That said, investment options can range from low to high risk.
2. On the other hand, saving is generally a safer bet, but it’s unlikely that you’ll end up with more money than what you put in.

If your goal is to grow your capital and you're willing to take on risk, investing might be a better option for you.

There are three ways in which your investments generate profits:

• Appreciation;
• Interest;
• Dividends.

Appreciation occurs when the value of something rises. If you bought a stock for $200 and now it's worth $500, that's appreciation. If you buy a bond, which is essentially a loan to a government or corporate entity, and you earn money as the loan is repaid, that’s interest. Lastly, if you buy shares in a company that performs well and distributes profits through payments, these are called dividends.

How to start investing? A preliminary step

Before you start investing, you should keep in mind that all investments carry risk.

It’s important to research first, whether it’s the companies you’re interested in investing in or if you’re thinking about hiring a professional to help you.

It's also essential to have an investment plan, with clear goals and a defined level of risk you're willing to take.

Historically, markets have experienced both ups and downs. And while, generally speaking, the stock market has gained over more extended periods, past performance does not define future results.

Do you want to learn how to make your money work for you? Download Hapi and improve your finances. Let’s look at some of the advantages:

• Anyone can download the app;
• Registration is quick and easy;
• Transfer as much money as you want without minimums;
• Start buying and selling your preferred stocks with no fees and in real time.
• But the best advantage is that you can now invest in both stocks and cryptocurrencies in the same portfolio—there are over 30 cryptocurrencies available!