Should you save or should you invest?

The issue of poverty is one of the worst problems we have at present most especially in developing countries where the poverty rate is larger than expected. Some of us are born rich while most are not. For those who are not “rich kids,” we learn how hard life is, and I’m sure our parents taught us the importance of every single penny for they work hard just to earn it and give us the decent life we need. I honestly knew this because I was born in a simple family as well.

Being born in a poor family is one that drives us to exert extra effort, and work harder so to lift our life from poverty, right? Sometimes, I feel like it’s a good opportunity to be born poor because we can feel, experience, and learn every hardship in life. This also teaches us how are we going to lift ourselves, and our family from poverty. Perhaps the most well-known solution for this is to educate ourselves. However, the time we need to finish our studies will last for 17 years or less. If I’ll ask you, are you willing to wait this long? And if you are, remember that 17 years is just the span of spending time in education hence it excludes the time you need to finally find jobs and earn money from it.

Note: Please bear in mind that although the paragraph above is quite discouraging for students, the author does not intend to mock the essence of education thus does not in any way push anyone to stop their studies.

The good thing about being poor is that we are taught thoroughly how to save money so that in a case like the pandemic we have savings that we can lean on. Although saving money is a good thing, it won’t grow bigger unless you keep adding on it.  Some are satisfied with saving money but some also want their money to grow more so instead of letting their savings in stagnant they invest so that the money will profit at least a little higher than bank interests.

 The question is, which is better? Saving or investing? Well, if you’ll ask me, I will probably pick investing because of the promising profit it may give. Before you answer this question, let us first define both variables.

Saving

Saving is simply the act of putting aside a portion of your money for future economic purposes. This can be done by anyone including kids. Usually, we save money in the banks or if we don’t have the time and money to spend for the requirements in the banks, we usually use a do-it-yourself (DIY) piggy bank.

Advantages of saving money

·         Saving money will save you in times of emergency.

·         The accumulated money from savings can be used to buy assets

·         It can cover your expenses when you needed them the most

The disadvantages of saving money

·         Saving money is a brilliant skill for not all people can maintain this characteristic but because life is full of uncertainty the act of saving will likely save your future for a short period of time.

·         The money you save will not grow.

·         If you use DIY piggy-banks, there is a probability that the money will decay or suffer physical damages

·         Hoarding coins, and bills will also affect the economic cycle of the country and the value of the currency we have.

·         There is a law regulating the illegal hoarding of money thus we might suffer from penalties.

Investing

Investing is the act of expending or committing money with the expectation of gaining profit. There are various types of investing such as; stock exchange, foreign exchange (Forex), and cryptocurrency investing.

Advantages

·         Your money will accumulate profit, thus making it grow

·         Can serve as your primary income

·         Can cover any expenses

Disadvantages

·         It is very risky

·         Volatile

·         Losing money is not an option

·         Need more technicalities and expertise to master

All in all, both practices are good and brilliant but we have to take and consider the disadvantages of the two. If you plan to save, just make sure to transfer your saving to the bank so that we can avoid both sanctions from the law and the other disadvantage of hoarding money. However, if you think that investing is a better idea, just make sure that you know what kind of investment you are dealing with. Remember, there are a bunch of scammers roaming around so you better be wise enough to deal with them, or else you’ll end up with nothing. The best way to defeat these scumbags is to educate yourself about the world you are entering. Also, make sure to regulate your emotion because it will hurdle your decision-making. Moreover, make sure that you are brave enough to fully accept when you lose your money, investing will not always bring you victory.

Lastly, it is excellent to save but we have to understand that inflation always strikes upwards thus your 1 peso now will only be worth a cent 1 to 3 years from the current year so it is always better to make it profitable than just keeping it in your cabinet.

So, where’s your stand? Which is better, saving or hoarding money or investing? Will you save or will you invest? The choice is yours.