Saving vs Investments: Which Route is Better?

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I am sure every adult has once asked themselves if they should invest the money they have or save it, especially if they don’t have much or just came into a bit of money.

Now when it comes to wealth creation, this debate is very important; should you save your money or invest it, after all, choosing the right one can be very beneficial.

So, before I go into explaining what I’d do in this dilemma, I will be explain what saving and investing means.


SAVING

Saving is simply putting or keeping a particular amount of money aside, this money can be kept just because or just incase of emergencies and most people usually would save 10-20% of their income.

Saving can be good because the money saved can be easily accessed in time of need and even though, some platforms to save might make it hard, it is still quite easy.

INVESTMENT

Investing is either purchasing of assets or putting your money into a particular avenue that can earn a return or increase in value.

Investment unlike savings is mostly aimed at long-termed objectives and it allows more diversification, unlike savings.


WHAT IS THE DIFFERENCE, IF YOU MAY ASK?

Well, there are a few distinctions between savings and investment and they are;

  1. Savings are low risk while investments are high risk.
  2. Savings are low interests while investments can have higher interests.
  3. Savings can be mostly for short term goals while savings are for longer term.

WHICH SHOULD YOU GO FOR?

First of all, I am not a financial advisor but, instead of choosing one or the other, it is usually advised to invest in both; either 50/50 or any other percentage that you feel comfortable with.

Both saving and investment are important and personally, I don’t believe that one should focus on just one solely.

With me, I try to do both because if I am investing all my income, I don’t know when I might have an emergency, and if I am saving all my income, I wouldn't be able to increase its value.

Anyways, with all these, it still depends on you and your long-term goal, so the question goes to you, “savings vs investment, which route is better?”.



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Posted Using LeoFinance Beta

Posted Using LeoFinance Beta

Posted Using LeoFinance Beta



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8 comments
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Saving is good, especially for rainy days and emergency situations. However, savings do not yield a profit. And overtime, they may depreciate in value with respect to inflation in economies, depending on the currency you are saving in.

Investment, however, is a great way to acquire returns (profits) on one's assets. This way, one is saving, but with a difference in returns; zero for savings, positive or negative for investments.

Making investments, like you have said, comes with higher risks than saving. It takes proper evaluation for one to determine the right ones. Besides, life is a game of risks. You just have to play your cards well to thrive.

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Exactly because while investment might yield rewards, it could also be a loss and also, you might need money urgently which can be gotten from your savings and not your investments.

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Saving is no longer a viable option due to inflation and monetary expansion... unless you are saving in something like HBD, which produces a return to counter inflation.

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Well I feel like saving is still important because you still need your currency in certain cases; so probably a balance is needed depending on your priorities.

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