Investment company

Imagine you have a piggy bank where you keep all your spare change. You might decide to take some of that money and put it into another piggy bank that belongs to a group of people, like your friends or family. This is kind of like what an investment company does, but instead of piggy banks, they use special accounts to keep track of people's money.

So say you give some of your money to the investment company. They take that money and combine it with money from other people who also invested with them. Then, they use all that money to buy things like stocks (which are little pieces of ownership in a company), bonds (which are like loans to companies or governments), or other types of investments.

The investment company then manages all those investments, which means they watch them to see if they're making more money or losing money. For example, if they bought stock in a company that ended up doing really well, the investment company would be happy because they could sell that stock for more than they paid for it and make a profit. But if they bought stock in a company that didn't do so well, they might lose money.

The investment company also charges a fee for managing all those investments, kind of like the tooth fairy takes one of your teeth and leaves a coin under your pillow as payment. But unlike the tooth fairy, the investment company is actually doing a lot of work to make sure your money is being invested in the best way possible.

So when you invest your money with an investment company, you're basically giving them permission to use your money (along with other people's money) to buy investments, manage them, and hopefully make more money for you in the process.