Save first, invest later – this is the most reasonable solution.

To save, or to invest – that is the question

The best way to answer the above question is to say: “do both.” Each method is related to a different goal and it’s difficult to compare them. This is why we’re going to explain the differences between them.

Saving

Saving is based on putting away particular amounts of money, which you don’t want to spend. This method builds your sense of security. However, there are cases in which you put your money away for a particular purpose. When you save money, you try to secure it in the best possible way. Most people pay their money to a savings account or to a savings deposit. That way, your money generates minor income.

Saving is a slow process, which requires regularity. However, it’s advantage is that it’s safe. Nevertheless, you can’t expect to gain large profits from saving, since the interest rates are minor. People who decide for this method want to be sure that they have some money somewhere, which can be used anytime they want, without having the feeling of spending their recent earnings.

Investing

Investing is related to a certain risk of losing money. This is why it’s worth to save a suitable amount that will secure you from any misfortunes. After having done this, you can use any surpluses to invest.

Those who decide to invest should assume that this is going to be a long-term process. You also need to know that the larger the potential profits, the larger the risk. If you wish to invest safely, you will have to settle for a smaller income.

If you’ve been thinking of investing in shares, investment funds or cryptocurrencies, you should sacrifice the money that can be lost without any harm. Of course, nobody wants to take negative scenarios into consideration, but, as we’ve said before – investments are related to risk.

Investing requires a huge endurance. Many people have ended up with a diagnosed depression because of following the volatile market quotations. Experts advise remaining calm. But is this even possible?

You can also invest in real estates. This is related to huge expenses, but eventually, the value of your real estate will increase significantly.

 

Author: Bien Magazine

Photos: DepositPhotos

 

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