Definition
An investment is an undertaking in which financial, physical or organisational resources are committed to achieve future economic, operational, strategic or social benefits.
Human Explanation
It means accepting a cost today in order to create greater value in the future.
Why it Matters
Every investment involves costs, risk and expected benefits, so it requires a deliberate assessment before a decision is made.
Conceptual Boundary
An investment is not limited to purchasing fixed assets. It may also involve developing technology, people, processes or the organisation.
Practical Perspective
Before starting an investment, assess its purpose, expected effects, sources of funding, risks and the likelihood of achieving the intended results.