invest
Invest has multiple legal meanings depending on context. In modern contract and business law, to invest generally refers to the act of committing money or resources with the expectation of generating income or profit, such as through businesses, real estate, securities, stocks, or other ventures. Investment inherently involves risk, and greater risk is often associated with the potential for greater return.
Investing is distinct from a gift, which transfers property or money without expectation of profit, and from a loan, which requires repayment of the principal, usually with interest.
Historically, the term derives from the Latin investire, meaning to clothe or adorn. In medieval European feudal jurisprudence, to "invest" or "enfeoff" referred to placing a person in possession of land in return for service and loyalty, often formalized through a ceremony of fealty. In this sense, both terms signified conferring a legal right or title to land.
[Last reviewed in September of 2025 by the Wex Definitions Team]
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