Investing is something that we already do, whether we are aware of it or not. We are investing as we juggle our resources like time, emotions, and finances daily. We can all become better investors with a bit of patience and practice.
When we invest our money, we buy assets with some of our money today, expecting that our investment will be worth more in the future.
When we speculate, we make decisions based on what is happening to the price of an investment in the short term with the hopes of making a quick buck.
When we invest, we base our decisions on the fundamental value of what we're buying.
Compound growth, or compounding, happens when an investment creates earnings, and then those earnings generate earnings.