Sunday, February 27, 2011

Invest or Save

Well we all know saving and investing are two different perceptions towards money. Let’s see how saving is quite different from investing. In savings, your initial amount of capital or cash remains constant, it is untouched and best part is that your earnings are guaranteed in terms of interest. So almost no risk involved in savings. In investment he capital value can go up or down. And returns are not guaranteed. So basically it involves risk compared to savings.
Savings provide resources for emergencies. The primary goal is to store funds and keep them safe. This is why savings are generally placed in interest-bearing accounts that are safe such as those insured or guaranteed by the government; so that you will have minimal loss if any. However, savings generally have low yields. And that is the reason people tend to take some risk and try the option of Investment. Investments provide much higher opportunities to yield more.
Saving is like your insurance. It insures you against any unwanted unpleasant hiccups in your life. And you are surely going to have some in your life such as losing your job, unexpected medical expense in the family. It is the backbone of you and your family’s financial well-being. Saved money grants you financial security. And the more you save, the more financial secure and independent you could be.
The objective of investing is generally to increase your wealth; so that you will realize all your dreams. But Investing will always involve risk. Never depend on your investment. There is always going to be risk of your stocks losing money big time. So Save some money and invest some to ensure better future.

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