Where should $VIM point to?

Where should `:h $VIM` point toward? Where vim is installed or where vim
configurations is situated? By default it points to where vim is
installed. But the help doc says:

> The environment variable "$VIM" is used to locate various user files
> for Vim, such as the user startup script ".vimrc".
^^^^^^

Is `$VIM` supposed to point to my user config folder or the installation
directory? What is its intended purpose?


P.S. I came to know about this variable from an SO question[1].

[1]: https://vi.stackexchange.com/q/38793/16280

--
Enan

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