Before getting into the practical details of the common misconception about investments, let us start by understanding what an investment is. An investment is an asset or item acquired with the goal of generating income or appreciation. Investments involve the purchase of goods that are not consumed today but are used in the future to create wealth.



It also involves purchasing an asset with the intention that in the near future, the assets will generate income or be sold for a higher price. Investments however, should not be confused with savings, which is keeping money for emergencies in a fund without the intention of generating wealth. The major differences between investments and saving is the risk involved and the return generated.

In investments, investors take risk by investing in particular investments assets that have a possibility of making losses while in savings, no risk is taken as the money is placed in a safe storage until maturity.

In most cases, most people do not start their investment journey due to the various misconceptions around investments. These misconceptions often pose a threat to one reaching their investment goals👌.