Saving excess money/cash to use for future purchases, emergency savings, or life expenses. This excess money can be saved in various places, financial institutions, credit unions, investment plans, or at home under lock and key.
Investing
What is an Investment?
An investment is a payment made to acquire the securities of other entities, with
the objective of earning a return. Examples are bonds, common stock, and preferred
stock.
There are two ways to earn a return on an investment, which are from ongoing payments
issued by the investment or through the appreciation in value of the asset.
The concept can also mean the acquisition of fixed assets for internal use, also with
the objective of earning a return. This type of investment is much more likely to
generate returns through positive cash flows, rather than through appreciation.
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Source: Accounting Tools (https://www.accountingtools.com/)
What is to the Rule of 72?
The rule of 72 is a simple formula that shows how quick your money will double at a given return rate. Essentially, you can divide 72 by your annual compound interest rate and see how many years it will take for your investment to double.