Saving VS Investments

Saving VS Investments

Saving and investing often are used interchangeably, but many new investors don't
understand that there is a difference. They have different purposes and play different
roles.

Saving is setting aside money you don’t spend now for emergencies or for a future purchase. It’s money you want to be able to access quickly, with little or no risk, and with the least amount of taxes. It is important to track your savings, putting a deadline, or timeline, and a value to your goals. Financial institutions offer a number of different savings options. 


Investing is buying assets such as stocks, bonds, mutual funds or real estate with the expectation that your investment will make money for you. Investments usually are selected to achieve long-term goals. Generally speaking, investments can be categorized as income investments or growth investments. 


When investing, it is important to invest wisely. You will have a better return if you begin investing early. Understanding different investment vehicles, what they are for, and how to use them is imperative to being successful. Three major ways to invest your money include; acquiring an ownership stake in a business, lending your savings and investing in real estate. Investors could potentially make money from real estate through, an increase in property value, rental income collected by leasing out the property to tenants, and profits generated from business activity that depends upon the real estate property. 


The main difference between saving and investing is risk. When you save for example
in a savings account it has little risk of loss of funds but also has minimal gains. Meanwhile when you invest, you have the potential for better long-term gains or rewards, but also the potential for loss. Another difference is interest, or money made. In investing, the goal is for the investments to make us money, while the goal of saving is to keep our money safe, making very little return. 


A shared characteristic of both saving and investing is the utmost importance that they play in our lives. If you are not doing either, the time to get started is now. This may require changes in spending, tracking, and in the utilization of your income, but it can and should be built into your plan. 


Time is the greatest opportunity to grow your money and to meet your goals. With a relatively small amount of money, you can start investing and saving and get on the path to reaching all of your financial goals, Just as T.Harv Eker said in Secret of Millionaire Mind  “Some people see a dollar as a dollar to trade for something they want right now. Other people see every dollar as a ‘seed’ that can be planted to earn a hundred more dollars then replanted to earn a thousand more dollars.” But remember, invest wisely!

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