What Is Investing?
Investing, broadly, is putting money to work for a period of time in some sort of project or undertaking in order to generate positive returns (i.e., profits that exceed the amount of the initial investment). It is the act of allocating resources, usually capital (i.e., money), with the expectation of generating an income, profit, or gains.
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.
Investing differs from saving in that the money used is put to work, meaning that there is some implicit risk that the related project(s) may fail, resulting in a loss of money. Investing also differs from speculation in that with the latter, the money is not put to work per-se, but is betting on the short-term price fluctuations.

KEY TAKEAWAYS
• Investing involves deploying capital (money) toward projects or activities that are expected to generate a positive return over time.
• The type of returns generated depends on the type of project or asset; real estate can produce both rents and capital gains; many stocks pay quarterly dividends; bonds tend to pay regular interest.
• In investing, risk and return are two sides of the same coin; low risk generally means low expected returns, while higher returns are usually accompanied by higher risk.
• Investors can take the do-it-yourself approach or employ the services of a professional money manager.
• Whether buying a security qualifies as investing or speculation depends on three factors—the amount of risk taken, the holding period, and the source of returns.