Savings vs Investments
Saving and investing often are used interchangeably, but there is a difference.
- 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.
- 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.
- Saving money typically means it is available when we need it and it has a low risk of losing value.
- Investing typically carries a long-term horizon, such as our children’s college fund or retirement.
- The biggest and most influential difference between saving and investing is RISK.
For short term (1 to 3 years)
For long term (5 years or more)
For Easy Access and withdraw
For High Returns
Low risk option
Medium and High Risk option
For safe and secure
For Beating Inflation
Short term like 1 year to 3 years
Longterm like 5 years and more
Ex: Fixed Deposits, Recurring Deposits, Bank savings account, Money at home…etc
Ex: Real estate, Bonds, Mutual Funds, Stocks, Gold…etc.