Investment vs. Savings

Of course aside from spelling, there are lots of differences between the two.

Savings are being set aside for specific purpose. For example, we are saving for emergency fund, for payments of debts and any other purposes.

Investment are being set aside for it to grow and multiply. Its goal is to accumulate funds. Investment is just another kind of passive income because we let them work for us.

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Savings are classified under short-term to medium-term goals while investment is for long-term purposes / goals.

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SAVINGS:

As mentioned above, we save money for short-term and meduim-term goals only. For example, you save money to pay for your debt, you save money to eat in a fancy restaurant someday, or for you also save money.

INVESTMENT:

If we are saving because of our short-term and medium-term goals, investment is for our long term goals.

Some examples of long-term goals are:

• You invest because of your retirement fund.

• You invest for your health insurance etc.

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Savings are safer than engaging in to Investment

SAVINGS

Savings are safe but the return of investment is quite a long. Interest is too low. Not risky at all.

Our money in the banks are not earning that much, or we just can not feel that we are receiving benefits since the interest that we are receiving is really not that high.

• Banks are too wise in utilizing our money. Our money in the banks are being invested in stock market, real estate etc. They also let other people borrow our money with higher interest rate compared to what rate are we going to receive from the banks. Banks are the ones who gets benefits from our money. Do not just let others get more benefits from you.

INVESTMENT:

Investment have a higher risk because it also gives us higher return.

• When it comes to investing, there are risks.

• The lower the risk the lower the return while in the other hand: the higher the risk, the higher the return.

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SAVINGS = DEAD MONEY

Savings does not grow, if you put a Php 5,000.00 in your wallet or bank account, the next time you check on it, your money is still the same. Your Php 5,000.00 in the bank may earn interest but only minimal, you really can not feel the changes. Inflation is your enemy here.

INVESTMENT:

Investment is a passive income wherein your money is working for you. Your money just keeps on circulating and circulating to generate money.

Passive income's benefit is that, even if you are not working, your income in your investment will not stop.

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Savings are more liquid rather than investment. When we talk about liquidity, it says that we can easily convert that into cash.

SAVINGS:

It can be withdrawn easily, when you put your money in your bank account, you can easily withdraw your money there.

INVESTMENT:

It takes time for you to convert it to money. But it depends on what kind of investment you have. There are investments that it will only take you minutes to few hours to be able to withdraw it.

An example of long-term investment that can not be easily be converted into cash is when you invest in properties just like house and lot or lot only. Properties are pricey, it is very difficult to find a buyer.

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SAVINGS = SEED

Our savings are considered as seeds, it will not grow unless you are going to plant it.

INVESTMENT = SEED MONEY

Our investment is considered as seed money, when it is being planted, it will generate income.

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FINAL THOUGHTS:

If you do not learn how to invest and you do not like to engage in investment, your money will be gone.

It is not bad in putting our money in banks, because we wanted it to be safe. Just do not leave your money there, remember that, the value of our money depreciates because of inflation.

It is not about on how much savings you own, it is all about on how much money you grow.

Use your money wisely. Put them to where it is supposed to be. You should be the one getting all the benefits your money does for you. Just do not let other people get it.