Financial Literacy: Exploring The Difference Between an Investment and an Expense

In theory, the definitions of an investment or an expense are quite clear-cut. An expense, or cost, is simply the dispensing of time, money, or resources. An investment, while an expenditure, comes with the expectation of a return.[1][2] While the two ultimately have the same goal—to acquire a good or service—their intentions and outcomes differ. So, let’s discuss the main differences between an expense and an investment and why sometimes the reasoning to back up each cost can make a difference. Defining Each Concept For starters, the period of usefulness of the asset acquired differs between an expense and […]