Table of Contents
What is Investing?
Investing is committing money or capital to a business venture to obtain an additional income or profit. Investing is a broad term that includes everything from high-risk, speculative investments to low-risk, “buy and hold” assets.
Investing in stocks, bonds, mutual funds, and other securities may be one way to invest. Some people invest in real estate, while others invest in valuable metals like gold or silver. There are many different ways to invest depending on your risk tolerance and goals.
Investing early is essential because it will give you a higher return on investment. If you invest $1000 today, in the next 20 years, that $1000 could grow to $27,000. However, if you invest that same $1000 at age 50, it will only grow to be worth $9,000.
In other words, the earlier you start investing, the more money you’ll make over time. This is because you would not be overly worried about risks so you can invest in highly profitable, equally risky investments.
What is buying Shares?
Shares are a type of security that represents ownership in a company. A share is equal to a fraction of the company’s total shares, which you can buy and sell on the stock market.
When you buy shares, you purchase an ownership stake in the company. In return for your investment, you get to share a stake in the business’s profits and have a say in its operations. Of course, you can also sell your share if you want to make money on it or if you think the share price will go down in the future.
Before investing, you must know what shares you want to buy. Additionally, you have to know or have an idea of what shares are profitable and which ones are not. Next, you need to know how much money you want to invest. This will determine which type of shares you should buy.
Some people invest in shares because they have a long-term investment plan, while others prefer to speculate on stocks that are likely to rise or fall in value.
Difference Between Investing and Buying Shares
Investing is the process of putting money into something in the hope that it will make more money in the future. Investments earn more money than savings, so it is a wise idea instead of letting money lie idle.
Buying shares is a way to invest, buying a company’s part. Shares are security you can buy and sell on capital markets. Investors buy shares to make money from the company’s success.
Some people invest in shares because they have always wanted to own a piece of their favorite company or to prepare for retirement by creating an income for themselves.
Comparison Between Investing and Buying Shares
|Parameter of Comparison||Investing||Buying Shares|
|Meaning||It is a general term that covers any activity of putting money into any venture that generates more money.||It is one activity in investing.|
|Scope||It includes investing in several ways.||It covers only investing in shares.|
|Limitation||The amount one wishes to invest is not limited.||The number of shares, hence the amount to invest, is limited according to company policy.|
|Duration||Returns can be immediate.||Returns obtained after one year or more.|
|Security||Some means of investing might be very risky.||It is a less risky way of investing.|