Have you ever had that chance to hold a certain amount of money, and you have no idea what to do with it?  If you ask people, some of them may advise you to save it, no risk involved, short-term, and instant access to your money.  Some will tell you that you should invest it, medium to high-risk, medium to long term, and it is harder to access your money, and that there’s a chance that you might lose it all or it might grow, fruitfully.  So if by any chance you come across this situation, what would you do?

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Saving

What is saving? 

Saving is putting your money aside to eventually come up with a sum, for it not to be spent because you ought to spend it for something; for a goal that you have set for yourself.

Why do people save?

Generally speaking, saving is what you do when you ought to spend for something: new house, new car, for family funds, etc.  Oftentimes, saving is usually done by people who think long-term because they want to be ready when an emergency complication pops out; they save in order for them to have emergency funds whenever, wherever.

Why you should save?

If you are someone who is not fully confident in risk-taking; someone who is not ready to play in the big aquarium, then saving is probably for you.  Minimal to no risk at all, and you will have complete control over your money.  It is also important to remember that saving should be a guarantee.  I mean you should start saving only if you are fully decided, fully disciplined about it.

One great tip for saving is to set aside 10-15% of your income to your savings.  Maybe start out at 5-8% and grow from there eventually.  This is a good practice for you in maintaining goal setting and delivering expectations.

Saving vs investing

Investing

What is investing?

In general terminology, investing is spending money with the expectation of it growing or yielding a product, (money, effort, energy, material things, asset, etc.) but that is not the case.  It involves risk, a lot of risk because you would not have a 100% guarantee of you getting your money back but since it has high risk, that correlates with the profit, having a profit you would almost never expect.

Read Also: How to buy stocks in Philippine stock market

Why do people invest?

People invest because they want to earn, learn, and be aware of how investing really works.  Even if it is so risky, people love it because at the end of the day, no matter how much they lost, they would still come back for more because they already learned from the previous investments they’ve done.

Investing is for those people who are not afraid to risk, for those people who can divide their finances equally for it not to negate or object the investments they have made or the investments they are about to make.

Why should you invest?

Investing is not just about the money; you can greatly pick-up a lot of things when you go on and try investing.  In fact, there are a lot of companies, establishments, etc., where you can invest your money in.  Although, as I’ve said, it involves high-risk, you will find out that in the long run, investments is what you should focus on now because it yields profit, long-term.

It’s what they always say; investing is not for the weak-hearted.  Yes, you will lose money, a lot of money in your journey in investing but I can guarantee and assure you that once you start investing, you will strive and work hard in order for you to learn more.

Of course, you can always save and invest at the same time.  One financial rule of thumb is that you don’t bet at all boats.  This means that you need to learn how to equally divide your finances in order for you to avoid complications say for example you lost your investment, it would not affect you personally, it would not affect your family, your payments for bills, etc.  So the first step is to learn how to divide your finances equally and then years from now, you would be financial magnate teaching people what they should do with their money.

Now, do you know what you should do with your money?



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