Entrepreneurship and investing has always been a subject I am passionate about; and sharing my thoughts or experience with others is also something I love doing. Now before I dive into the intricacies of investing, I consider it wise that you first get a grip on the basics of investing. Most people think they understand the word “investing” but in reality, they don’t.

                What is investing?

There are several definitions of the word “investing.” I looked up the word “investing” on Google and I found several definitions. Some of the definitions of investing are:

a)            Investing is putting your money to work for you.

b)            Investing is how you make your money grow or appreciate for long term financial goals.

c.             Investing is the proactive use of your money to make more money.

If you look up the word in the Oxford dictionary, investing is defined as “the process of buying property, shares in a company, etc in the hope of making a profit.”

Most investing beginners see investing as the act of putting in money in a system for a return on investment. Some see investing as a process of putting your money to work while others see investing as the process of buying and selling stocks, real estate or other investment products. One true fact about the word investing is that it means different things to different people. An entrepreneur building a business is investing. An individual who buys stocks, real estate or mutual funds is investing. A man who raises a large family is investing; and an individual that attends seminars, workshop or even attend college is also investing. So in actual sense, investing is what you take it to be.

                Now what truly is investing?

                “Investing is a process or financial plan to get from one financial level to another.” – Robert Kiyosaki

Of all the definitions I have heard; I think the definition above best describes the concept of investing. Simply put: investing is a process or plan to get from one financial point to another? To further help you understand the simplicity of the word “investing”, let’s analyze the instances below:

1. Ted has three wives and a very large extended family. He provides the basic needs of the family and makes sure they are well taken care of. Ted hopes that his family will take care of him when he’s old.
2. Andrew keeps two jobs, lives lean and study’s hard because he wants to graduate from college and get a high paying job.
3. Ann analyzes and buys stocks with the expectation that the stocks will appreciate in value.
4. Karen buys and fixed apartment properties with the aim of generating rental income.
5. Mark is a musical celebrity. He buys luxury cars, clothes and other items because he takes his outlook and overall personality as a priority.
6. Terry specializes in collecting art works.
7. Paul collects rare gold coins.

Now what do these individuals have in common? The answer is simple; they are all investing. The only difference between them is their choice of investment product, the processes they went through and the corresponding result. The point I want you to absorb is that investing is not a big deal; the big deal lies in the three statements below:

1. Why are you investing?
2. What are you investing in?
3. How are you investing?

Most people call themselves investors; yet, they’ve never given a thought to the three questions above. This is the sole reason why I believe in understanding the basics first; regardless of the venture or task you are undertaking. Once again, I repeat the definition:

                “Investing is a process or financial plan to get from one financial level to another.”

Now that you’ve understood the true meaning of investing, I think we can now move on to other fundamentals of investing.